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Steel makers warn of harsher year for markets

European steel producers are warning of a bigger downward trend in the markets than had been expected.

The latest quarterly Economic and Steel Market Outlook from the European Steel Association (Eurofer) lists high energy prices, persistent inflation, economic uncertainty and geopolitical tensions as ongoing factors affecting demand.

Eurofer argues these are being exacerbated by a manufacturing crisis affecting the largest steel-using sectors, including construction and automotive.

Consumption down

According to Eurofer’s outlook, apparent steel consumption continues to deteriorate. After a 3.1% slump in the first quarter of 2024, an expected rebound for the full year has been revised downwards from 3.2% to 1.4%. and from 5.6% to 4.1% for 2025.

In the same period, the output of steel-using sectors decreased by 1.9% despite stronger-than-expected resilience in 2023. For the rest of the year, a decline of 1.6% is expected, worse than a previous projection of 1%.

Automotive output fell 0.9%, a trend expected to continue throughout 2024, resulting in a slump of 3%, significantly higher than the previous estimate of just 0.4%.

A second consecutive recession is forecast for the construction sector, which accounts for the largest share of steel consumption in the EU at 35.

Recovery?

While a recovery of 2.3% in these sectors is anticipated in 2025, steel imports at 27% remain at an historically high proportion.Domestic deliveries contracted by 5.8% in Q1 after growing 1.3% in the preceding quarter.

‘The situation requires urgent action at EU level, as both European steel production and related clean tech value chains are at risk,’ says Eurofer dg Axel Eggert. ‘As Commission President von der Leyen said, “the future of our prosperity must be made in Europe”.

‘We look forward to working with the Commission President to deliver a European Clean Industry deal with a steel pact at its core. Europe is stronger with European-made steel.’

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