EU steel demand to recover in 2025 - Worldsteel

The 7 countries of the European Union plus the United Kingdom will have to wait until 2025 for steel demand to recover properly. The World Steel Association forecasts that EU steel demand will increase only modestly this year in the form of a "technical recovery", with a larger rise of 5.3% in 2025. In 2024, steel demand will be only 1.5 million tons higher than in 2020, the year of the pandemic.

Europe is the region currently facing the biggest challenges, according to the Worldsteel Short Range Outlook (SRO) steel demand forecast for 2024 and 2025. and a partial withdrawal of fiscal support while energy and raw material prices remain high.

“The persistence of these headwinds has led to a significant drop in regional steel demand in 2023 to its lowest level since 2000 and a significant downward revision to the forecast for this year,” Worldsteel said.

European demand stood at 136.8 million tonnes in 2023 and is expected to reach 140.7 million tonnes this year, with modest growth of 2.9%. However, demand is forecast to rise 5.3% year-on-year to 148.1 million tonnes in 2025.

Germany will remain in the top ten largest steel consuming regions in the world, along with China, India, the USA, South Korea, Japan, Russia, Turkey, Mexico and Brazil. In 2023, Germany consumed 28 million tons of steel, and in 2024 it is forecast to consume 28.9 million tons, reflecting a growth of 3.2%. The country is expected to use 31.8 million tonnes in 2025, with a notable 10% year-on-year increase.

The housing crisis is expected to continue this year in most major markets, with a recovery forecast for 2025. The sector is suffering from high construction costs and labor shortages, which could reduce growth in public infrastructure investment and production in the short term. Global manufacturing activity should begin to improve in 2024, although it remains impacted by weak demand, high costs and limited financing. In contrast, the auto industry, which posted a strong recovery in 2023, is expected to show weak growth in 2024.

The green transition will remain a strong driver for investment in public infrastructure. “A recent Economic Committee study estimates that global demand for steel for new wind turbines will triple by 2030 to approximately 30 million tonnes compared with the early 2020s,” the report said. He adds that while the share of wind power steel demand will remain relatively low in overall global demand, this could provide very significant support to overall steel demand in some regions such as Europe.

While global geopolitical and inflation tensions remain, a faster end to inflation and further easing of monetary policy could support steel demand, particularly in the construction sector, as well as increased investment in decarbonization and public infrastructure to protect against climate change risks.