The current downturn in EU apparent steel consumption—reflecting poor demand conditions— began in the second quarter of 2022, triggered by war-related disruptions, as well as unprecedented increases in energy prices and production costs. This downturn has persisted to date, resulting in the third consecutive annual recession. 

Demand conditions have been worsening considerably since the second half of 2022, and this negative cycle has continued until the third quarter of 2024, mainly as a result of growing global economic uncertainty, higher interest rates – before policy rate cuts were implemented - and overall manufacturing weakness. The dire consequences of the conflict in Ukraine and the energy shock on steel-using industries, along with worsened overall economic outlook, triggered a severe recession (-8%) already in 2022. These protracted downside factors further impacted apparent steel consumption in 2023, resulting in two other consecutive annual drops in 2023 and 2024 (-6% and -1.1%, respectively). In 2025, contrary to earlier expectations of a more favourable industrial outlook and an improved steel demand, apparent steel consumption is now set to decline again (-0.9%). This downward revision is largely due to the anticipated impact—albeit difficult to quantify— of U.S. tariffs and the resulting uncertainty and trade-related disruptions. In 2026, apparent steel consumption is projected to finally recover (+3.4%), conditional on a positive evolution in the industrial outlook and an easing of global tensions, both of which remain unpredictable at this stage. In 2025, against expectations earlier this year of more favourable developments in the industrial outlook and improvement in steel demand, apparent steel consumption is now set to experience another drop (-0.9%), a significant downward revision from the previously forecasted growth (+2.2%). In 2026, apparent steel consumption is finally projected to rebound (+3.4%), conditional on a positive evolution of the industrial outlook and easing trade and global geopolitical tensions, which all are unpredictable at the moment.

The overall evolution of steel demand remains subject to very high uncertainty. No improvement in apparent steel consumption is expected before the first quarter of 2026, and consumption volumes are expected to remain far below pre-pandemic levels.

EU steel market overview

In the fourth quarter of 2024, apparent steel consumption temporarily recovered (+0.5%), after three consecutive quarterly drops. Total consumption volume in the fourth quarter of 2024 stood at 30.1 million tonnes. 

Domestic deliveries mirrored the evolution in demand and contracted (-2%, as in the preceding quarter). In 2023, domestic deliveries markedly dropped (-4.6%), and also contracted in 2024 (-2.8%) reflecting weak steel demand.

Imports into the EU - including semi-finished products - increased (+6.3%) in the fourth quarter of 2024. It is worth noting that in absolute volumes the share of total imports out of apparent consumption has remained considerably high in historical terms throughout 2023 and up to the fourth quarter of 2024, standing at 27% (28% in the preceding quarter). In the entire year 2024, the share of imports was 27%.

EU steel-using sectors

In the fourth quarter of 2024, the Steel Weighted Industrial Production index (SWIP) sharply dropped (-4.9%) for the fourth consecutive time, matching the same rate of decline observed in the preceding quarter). Until the end of 2023, EU steel-using sectors’ output continued to show resilience and grow, albeit at a slower pace, despite the prolonged impact of Russia’s invasion of Ukraine, overall manufacturing weakness and global geopolitical tensions, along with above-average energy prices.

The positive trend in overall SWIP, started after the pandemic, continued up to the fourth quarter of 2023, in spite of soaring energy prices impacting production costs, component shortages and lower output that began to take their toll on total production activity in steel-using sectors. This led to a deterioration of the economic and industrial outlook in the EU – particularly due to high inflation and the subsequent interest rate hikes by the European Central Bank (ECB) – that had only a limited impact on steel-using sectors’ output up to the end of 2023, with the exception of the construction sector. As the industrial and economic landscape has turned even gloomier in the EU during 2024, developments of the SWIP index were a combination of a continued downturn in the construction, mechanical engineering, domestic appliances and metalware sectors, and also in the automotive sector. The construction sector, in particular, had already entered recession in the third quarter of 2022, and this trend –exception for a couple of quarters - has continued up to the fourth quarter of 2024. Its recessionary trend is expected to persist until the third quarter of 2025.

Due to U.S. tariffs – both announced and implemented - ongoing economic uncertainty is likely to intensify, weighing on growth also in the coming quarters. This is expected despite monetary easing by the ECB, which implemented seven consecutive 25 bps policy rate cuts between 2024 and 2025), the effects of which will not be fully visible in the short-term.

In 2024, steel-using sectors’ output growth experienced a steeper drop than previously foreseen (-3.7%, revised downwards from -3.3%). This is mainly due to drops in construction and automotive output. Due to growing uncertainty following U.S. tariff announcements, another recession—albeit a more moderate one— is anticipated in 2025, in contrast to previously forecasted growth (+0.9%), before a modest rebound (+1.3%) is expected in 2026.

 Conclusions

The ongoing economic uncertainty is set to continue affecting steel market growth from the demand side over the upcoming quarters:

1. Despite EU industry proving quite resilient throughout 2023, output in steel-using sectors in the EU contracted in 2024, mainly driven by declines in the construction and automotive sectors. The outlook for 2025 and 2026 remains overshadowed by a worsening combination of very high tariff-related uncertainty, weak conditions in manufacturing sectors – and consequently lacklustre steel demand - severe geopolitical tensions, and broader economic challenges. Although repeated monetary easing in the euro area, its effects on the economic cycle will not be visible in the short-term.

2. While output grew more than expected (+2.9%) in 2022, in 2023 SWIP growth slowed down (+1.7%), albeit with wide differences among individual EU economies and industrial sectors. In 2024, growth in steel-using sectors declined more sharply than previously estimated (-3.7% vs. -3.3%), primarily due to the recessions in the two largest steel-consuming sectors- construction and automotive. Persistent geopolitical tensions and the delayed effects of monetary easing weighted on the overall manufacturing sector.

3. Another contraction, albeit milder, is expected in 2025 (-0.5%), contrary to a previous growth forecast (+1.6%). SWIP is then projected to recover modestly (+1.3%) in 2026.