SteelOrbis talked to Luciano Giua, economist and policy analyst at the Organization for OECD, regarding the latest developments in EU steel market.
How would you describe the current steel demand trends in the EU steel market across major sectors (construction, automotive, machinery, etc.)?
Demand remains weak across most major EU economies, reflecting subdued construction activity, lower automotive output and soft manufacturing orders. Germany, France and Spain are contracting, while Italy shows modest resilience linked to construction demand.
How are high energy prices affecting output, investment and competitiveness?
High electricity and gas prices continue to weigh on production, margins and investment capacity. Compared with MENA producers, who benefit from subsidised energy, EU mills face a clear cost disadvantage that erodes competitiveness.
What are the effects of geopolitical developments on trade routes?
In the EU, stricter safeguard measures and the rollout of CBAM have tightened import conditions and supported prices, even as weak demand and high costs weigh on the sector. Globally, Chinese exports are reshaping trade routes, with flows increasingly redirected toward less protected markets in Asia, Africa and Latin America.
What are your expectations for steel demand and prices in the short to medium term?
EU steel demand is expected to remain weak through 2025 but stabilise as conditions improve, with a gradual recovery anticipated from 2026 driven by infrastructure and defence spending.
Are you optimistic or cautious about the EU steel sector’s medium-term competitiveness?
Cautious. Falling profitability, high energy and borrowing costs, and limited investment capacity all weigh on medium-term competitiveness despite some regional improvements.
How do you see the balance between environmental targets and global competitiveness?
Our recent analysis suggests this remains a challenge: persistent cost pressures and tight margins risk slowing investment in decarbonisation, while producers in regions with subsidised energy retain a competitive edge.