According to the report, apparent steel consumption increased by 4.4% in 2025. However, this recovery was largely driven by exceptional factors and does not signal a sustainable improvement. Demand remains around 10 million tonnes below pre-pandemic levels, while growth is expected to slow sharply to 0.4% in 2026, followed by only a gradual recovery in 2027.
European Steel Association (EUROFER) Director General Axel Eggert stated that the limited improvements in demand should not be considered a real recovery, noting that “the manufacturing sector remains weak, energy costs remain high, and uncertainty linked to global trade and geopolitical tensions continues to weigh on investment and industrial activity.”
Recovery delayed in steel-using sectors
The report noted that demand from steel-using sectors declined by 0.1% in 2025, marking a second consecutive year of contraction. Although a modest recovery of 1.3% is expected in 2026, a more meaningful rebound is not anticipated before 2027.
It was also highlighted that the automotive industry, one of Europe’s largest steel-consuming sectors, continues to be a major obstacle to recovery. Automotive production fell sharply in 2024 and continued to decline in 2025, driven by weak consumer demand, a slower-than-expected transition to electric vehicles, and ongoing uncertainty affecting manufacturers. The sector is expected to remain under pressure throughout 2026.
In contrast, the construction sector, Europe’s largest steel consumer, continues to provide support to demand. However, growth remains modest, with activity increasingly constrained by rising financing costs and a weakening economic environment.
Energy costs and global competition remain under pressure
The EUROFER report stated that the overall economic outlook remains challenging. It noted that rising energy prices linked to tensions in the Middle East have renewed inflationary pressures and led to tighter monetary policies, while industrial production in many major EU economies remains below pre-pandemic levels.
The report also highlighted that despite a slight decline in imports in early 2026 following exceptionally high levels at the end of 2025, global steel overcapacity and intense international competition continue to put pressure on European steel producers.
EUROFER concluded that without stronger industrial growth, improved competitiveness, and measures to reduce energy costs, the European steel market is likely to remain under pressure in the foreseeable future.
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