The Fourth Quarter 2025 Report published by the European Steel Association (EUROFER) reveals that the weak trend in EU steel demand will continue until 2026. According to the report, the current trend in the EU’s apparent steel consumption shows that the negative cycle—triggered by war-related disruptions and the increase in energy prices and production costs—has still not been broken. This situation first became evident in the second quarter of 2022.
EUROFER stresses that the weakness in steel demand continues due to global economic uncertainty, the previously high interest rates before eight consecutive policy rate cuts, the overall weakness in the manufacturing sector, and now the risks arising from U.S. tariffs.
Three consecutive years of decline in steel consumption
The report states that the war in Ukraine and the energy shock affecting steel-using sectors, combined with the worsening economic outlook, caused apparent steel consumption to contract by 8% in 2022. These prolonged pressures continued in 2023 and 2024, with consumption shrinking by 6% in 2023 and 1% in 2024.
EUROFER forecasts that apparent steel consumption will decline by another 0.2% in 2025. The main reasons for this drop are the expected—but difficult to quantify—impacts of U.S. tariffs, the uncertainty surrounding them and weak trade expectations.
In contrast, apparent steel consumption is expected to recover by 3% in 2026. This improvement is projected to be driven by potentially positive developments in the industrial outlook and a possible easing of global tensions; however, EUROFER notes that both factors remain highly uncertain.
The report also states that no meaningful improvement in steel demand is expected before the first quarter of 2026 and that consumption will remain significantly below pre-pandemic levels.
Second-quarter contraction in the EU steel market
In the second quarter of 2025, the EU’s apparent steel consumption decreased by 1.8% year-on-year, reversing the upward trend seen in the previous two quarters. In the first quarter, consumption had increased by 2.2%. EUROFER highlights that these increases were largely due to the very low base levels of the previous year. Total apparent consumption in Q2 2025 was recorded at 34.3 million tonnes.
During the same period, domestic deliveries also fell in line with demand, decreasing by 1.6% year-on-year. This decline followed a 1.3% increase in the previous quarter. EU domestic deliveries had dropped by 4.6% in 2023 and 2.8% in 2024.
EU steel imports (including semis) fell by 3.3% year-on-year in the second quarter of 2025. In the previous quarter, imports had shown only a slight 0.3% decline. However, in the first eight months of 2025 overall, imports increased by 0.3%.
The share of imports in total apparent steel consumption reached 27% in Q2 2025, maintaining historically high levels. This ratio was 25% in the previous quarter and again 27% for the whole of 2024.
Sixth consecutive contraction in steel-using sectors
In the second quarter of 2025, the Steel-Weighted Industrial Production Index (SWIP) declined for the sixth consecutive quarter, falling by 0.9%. This followed a steeper 3.2% decrease in the previous quarter.
EUROFER notes that steel-using sectors remained relatively resilient until the end of 2023 despite the Russia–Ukraine war, high energy prices that increased production costs, supply shortages and general production weakness. However, conditions deteriorated significantly from 2024 onward.
According to the report, the SWIP index declined throughout 2024 due to sharp falls in construction, mechanical engineering, home appliances, metal goods and the automotive sector—one of the sectors most sensitive to global trade volatility.
EUROFER states that the economic pressure will intensify in the coming quarters due to the uncertainty created by the announced and implemented U.S. tariffs, and therefore growth will continue to be negatively affected. Although the ECB implemented eight consecutive 25-basis-point rate cuts between 2024 and 2025, this monetary easing has not provided short-term support to the economy.
Results and outlook
According to EUROFER, the demand outlook for the steel market remains under negative pressure:
1. Production in steel-using sectors in the EU continued to contract throughout 2025, particularly due to declines in construction and automotive. The combination of uncertainty caused by high tariffs, weak conditions in manufacturing, geopolitical risks and broader economic challenges is overshadowing the outlook for both 2025 and 2026. Monetary easing in the eurozone will not provide short-term support.
2. In 2024, growth in steel-using sectors contracted more than expected due to weaker-than-anticipated performance in construction and automotive. The growth expectation was 3.6%, but actual growth came in at 3.3%. Geopolitical risks and the delayed effects of monetary easing negatively affected manufacturing.
3. In 2025, a 0.5% contraction is expected in steel-using sectors. Although this forecast is better than the previous projection of –0.7%, the automotive sector is expected to face a sharp decline of –3.8%. The construction sector is expected to show only limited growth of 0.1%. SWIP is forecast to return to a growth trend in 2026 with an increase of 1.8%.
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