According to the Economic and Steel Market Outlook 2026-2027/Q3 2026 Report from the Economic Committee of the European Steel Association (EUROFER), apparent steel consumption in the EU increased by 1.5 percent year on year in the first quarter of 2026 to 34.4 million mt.
Apparent steel consumption forecast revised downward for 2026
EUROFER expects the recovery to lose momentum. Reflecting market stabilization expectations and continued weakness in manufacturing demand due to disruptions in the Strait of Hormuz and other geopolitical issues, the association now forecasts apparent steel consumption to grow by only 0.1 percent in 2026 to 135 million mt, down from its previous forecast of 0.4 percent. Growth is then expected to strengthen to 2.3 percent in 2027, bringing consumption to 138 million mt. Even so, volumes are projected to remain around 7 million mt below pre-pandemic levels in 2019.
Meanwhile, real steel consumption increased by 1.6 percent year on year in the first quarter of 2026, following an 11.5 percent rise in the fourth quarter of 2025.
Production and capacity utilization remain weak
EU crude steel production fell to a record low of 125.8 million mt in 2025, down 2.9 percent year on year, and increased by 1.1 percent in May 2026. According to EUROFER, the weakness was due to lackluster demand from steel-using sectors and persistently higher energy and production costs compared to other major steel-producing regions. Capacity utilization rose to 67 percent in May 2026 from 65 percent in 2025, but remains low in historical terms.
Steel-using sectors to recover gradually
Demand from steel-using sectors, measured by the Steel Weighted Industrial Production (SWIP) index, is forecast to increase by 1.5 percent in 2026, following declines of 4.1 percent in 2024 and 0.1 percent in 2025. Construction, the EU's largest steel-consuming sector, is expected to grow by 1.8 percent in 2026 and mechanical engineering by 1.9 percent, while automotive output is forecast to decline by a further 0.9 percent. In 2027, SWIP growth is expected to accelerate to 2.5 percent, driven by construction (up 2.9 percent), mechanical engineering (up 1.8 percent), and a rebound in automotive output (up 3.5 percent).
EU economy shows resilience despite geopolitical tensions
EUROFER noted that the EU economy has proved resilient despite tensions in the Middle East, though this has not yet translated into a meaningful industrial recovery. EU GDP grew by 1.2 percent year on year in the second quarter of 2026, up from 0.8 percent in the first quarter. In the same period, real GDP rose by 0.9 percent in Germany, 0.7 percent in France, 1 percent in Italy and 2.7 percent in Spain. EUROFER forecasts EU GDP growth of 1.1 percent in 2026 and 1.4 percent in 2027, while the IMF expects euro area GDP to grow by 0.9 percent and 1.2 percent, respectively.
