While the report stated that the recovery will be limited and consumption will continue to remain well below pre-pandemic levels, it was emphasized that the market share of imports reaching record levels has increased the structural pressures on the European steel market. According to the report, the industrial outlook in 2025 improved slightly compared to previous expectations and steel demand gave signals of stability, especially in the second half of the year. However, this development largely resulted from the comparison with the very low volumes recorded in the second half of 2024. In this framework, steel consumption is expected to increase by 2.4% in 2025 instead of the 0.2% decrease projected in the previous outlook. It was expressed that the increase will occur thanks to stronger than expected demand in some national markets and will partially offset the impact of trade-related disruptions, including US customs duties.
On the supply side, it was stated that EU crude steel production continued its decline. Accordingly, production in 2025 decreased to 125.8 million tons from the level of 130 million tons in 2024, showing a decrease of approximately 3%. It was noted in the report that this situation points to the ongoing contraction and low capacity utilization in the European steel sector due to weak demand and increasing import pressure. Data regarding the EU steel market showed that apparent steel consumption in the third quarter of 2025 recovered following the decline in the previous two quarters. In the period in question, consumption increased by 4.6% on an annual basis and reached the level of 32 million tons. Domestic deliveries followed a similar course and recorded an annual increase of 3.4% in the third quarter, following the 1.6% decrease in the previous quarter. Nevertheless, domestic deliveries had experienced a sharp decline under the influence of weak demand in previous years; deliveries had regressed by 4.6% in 2023 and 2.8% in 2024.
On the other hand, a strong increase drew attention on the import side. Steel imports to the EU, including semi-finished products, increased by 10% in the third quarter of 2025 after the 3.2% decrease in the previous quarter. Thus, the share of imports in the EU's apparent steel consumption rose from 25% in the previous quarter to the record level of 29%. In the whole of 2024, the share of imports had been realized as 27%. Developments in steel-using sectors also held an important place in the report. The Steel Weighted Industrial Production index (SWIP) showed an increase of 1.8% in the third quarter of 2025 after a decline that lasted six quarters. However, the index continued to reflect the impact of weakness in the automotive, mechanical engineering, household appliances, and metalware sectors. It was stated in the report that especially the automotive sector is one of the areas most exposed to global trade and external shocks.
In contrast, it was expressed that the construction sector has given limited signs of recovery since the second quarter of 2025. In the third quarter, a partial recovery was observed in manufacturing activities and steel-using sector production thanks to modest improvements in industrial indicators and the delayed effects of low interest rates. According to the report, the SWIP index showed a 3.5% decrease in 2024 following the relative resilience in the previous two years. The reduction in construction and automotive production was decisive in this regression. Due to increasing uncertainties, a more limited contraction (-0.3%) is expected in 2025, while a decrease of 4.3% and 0.8% is projected in automotive and mechanical engineering production, respectively. In the medium term, there is an expectation of a more moderate recovery. SWIP growth is expected to rise to 1.9% in 2026 and reach 2.2% in 2027. It was expressed in the report that this increase will occur especially with the support of the growth in construction production and the recovery in the automotive sector.
Comments
No comment yet.