Alessandro Sciamarelli, EUROFER director of economic research and market analysis, spoke to SteelOrbis, reviewing 2025 and giving his expectations for 2026.
How do you evaluate 2025?
The trend in EU apparent steel consumption continued to mirror weak demand conditions throughout 2025. These originated in the second quarter of 2022 due to war-related disruptions, along with rises in energy prices and production costs. This negative cycle was exacerbated during 2023 and 2024, mainly as a result of growing global economic uncertainty, higher interest rates - before eight policy rate cuts were implemented - and overall manufacturing weakness, now coupled with growing uncertainty around US tariffs and their consequences.
The consequences of the conflict in Ukraine and the energy shock on steel-using industries, along with an overall worsened economic outlook, triggered a severe recession in EU steel consumption (-8%) already in 2022. These protracted downside factors further impacted apparent steel consumption, resulting in two further consecutive annual drops in 2023 and 2024 (-6% and -1%, respectively).
In 2025, contrary to earlier expectations of a more favourable industrial outlook and improving steel demand, apparent steel consumption is set to decline again, albeit more moderately than in previous years (-0.2%, unchanged from our previous outlook), which marks the fourth consecutive annual recession. This will be driven by the expected - albeit difficult to quantify - impact of US tariffs and the resulting uncertainty and trade-related disruptions.
What are your expectations for 2026?
Apparent steel consumption in the EU is set to recover by three percent (formerly forecast at 3.1%) in 2026, albeit to consumption volumes far below pre-pandemic (i.e., 2019) levels, and conditional on a positive evolution of the industrial outlook and an easing of global tensions, both of which remain unpredictable at this stage.
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.
Steel demand from the main using sectors remains subdued, mirroring the weak conditions of the entire manufacturing sector in the EU. The construction sector (37% of steel consumption) will record minimal growth in output in 2025 (0.1%, after a contraction of -2% in 2024), due to the lagging recovery in the housing market despite monetary easing and lower interest rates. Meanwhile, bigger impetus from civil engineering and infrastructure schemes will lead to output growth of 2.2 percent in 2026.
The automotive sector (20% of steel consumption) remains in the doldrums, due to persisting uncertainty and delays over EV implementation, with the sector being more vulnerable than others to global trade and supply chain shocks. Output will drop by four percent in 2025 (-10% in 2024) and recover by a meagre 1.4 percent in 2026, with output volumes below 2019 levels.