According to the Economic and Steel Market Outlook 2023-2024/Q2 2023 Report from the Economic Committee of the European Steel Association (EUROFER), in the fourth quarter of 2022 apparent steel consumption in the EU-27 amounted to 29.6 million mt, decreasing by 19.3 percent compared to the same period of 2021, recording the second-worst performance after the pandemic. This further weakened overall apparent steel consumption for 2022, which decreased by 7.2 percent year on year as steel demand shrank significantly, due to energy crises and the impact of the war in Ukraine.
“The steel industry was severely knocked at the end of 2022 and is striving to recover, but the conditions are not yet conducive. Energy prices, production costs and inflation are still much higher than pre-crisis levels. Decarbonisation projects are underway, but we need access to affordable fossil-free electricity as of now, if we want the EU steel sector to transition while staying competitive at a global level,” Axel Eggert, director general of EUROFER, said.
According to the association, the downtrend in apparent steel consumption is expected to reverse only from the second half of this year, while apparent steel consumption is projected to decrease by one percent in 2023 as high uncertainty continues, before rebounding by 5.4 percent in 2024. These are conditional upon developments in the market outlook and steel demand.
Despite the war in Ukraine and rising energy prices, the output of steel-using sectors increased by 2.5 percent in the fourth quarter last year and by 3.1 percent in the whole year, largely due to the relative recovery of the automotive industry and the steady performance of the construction sector. EUROFER expects the output of steel-using sectors to increase by 0.6 percent in 2023, before increasing by 2.3 percent in 2024.
In addition, domestic deliveries in the EU decreased by 15.2 percent in the fourth quarter of 2022 and by eight percent in the full year, amid the significant decline in steel demand.