According to the Economic and Steel Market Outlook 2026-2027/Q1 2026 Report from the Economic Committee of the European Steel Association (EUROFER), in the third quarter of 2025 apparent steel consumption in the EU-27 amounted to 32 million mt, up by 4.6 percent year on year, following a 1.7 percent drop in the second quarter of 2025.
According to EUROFER, the industrial outlook in 2025 showed a modest improvement, particularly in the second half of the year, despite earlier forecasts pointing to another decline. However, this recovery largely reflects a comparison with the very weak volumes recorded in the second half of 2024. Consequently, apparent steel consumption in 2025 is now expected to increase by 2.4 percent, compared with the previous outlook which projected a slight contraction of 0.2 percent. The upward revision has mainly been supported by stronger-than-anticipated growth in several national markets, partly offsetting the negative effects of trade disruptions and uncertainty related to US tariffs.
Industrial activity shows early recovery signs as SWIP rises
Meanwhile, industrial activity in sectors that consume steel has begun to show early signs of recovery. The Steel Weighted Industrial Production (SWIP) index rose by 1.8 percent in the third quarter of 2025, marking the first increase after six consecutive quarters of decline. Nevertheless, the overall outlook remains cautious. The SWIP index is projected to slip slightly by 0.3 percent in 2025 following the sharp contraction of 3.6 percent recorded in 2024, before returning to moderate growth of 1.9 percent in 2026 and 2.2 percent in 2027. While the construction sector is gradually improving, industries such as automotive and mechanical engineering continue to face pressure from weak global demand and persistent trade uncertainty.
Steel consumption expected to grow modestly in 2026-2027
Looking ahead, apparent steel consumption is forecast to continue expanding in 2026 by 1.3 percent, though at a slower pace than previously estimated, with the earlier projection of three percent growth now revised downward. A similar rate of increase, at around 1.4 percent, is also expected in 2027, provided that industrial conditions improve and global tensions begin to ease.
Nevertheless, despite the anticipated recovery, steel demand is projected to remain significantly below pre-pandemic levels, by approximately 11 million mt in 2026 and about 9 million mt in 2027, underscoring the ongoing vulnerability of the industrial environment.
EUROFER warns of rising imports and shrinking EU steel production
Axel Eggert, director-general of the European Steel Association (EUROFER), stated that Europe’s steel production continues to decline while imports are taking an increasingly larger share of the EU market. He emphasized that EU policymakers need to swiftly agree on the new steel trade safeguard mechanism without diluting its effectiveness, warning that failure to do so could lead to further losses in Europe’s industrial capacity. Eggert also pointed out that the crisis involving Iran highlights how vulnerable European industry remains to global energy shocks, adding that, if the EU aims to retain steel production and attract green investments within the region, it must ensure both robust trade protection and access to affordable electricity.
Energy price uncertainty grows amid Iran conflict and geopolitical tensions
Meanwhile, the ongoing war in Ukraine and the tensions in the Middle East, together with other geopolitical risks, have so far not caused significant increases in oil and gas prices, largely due to weak energy demand and subdued global economic activity. However, the conflict involving Iran has significantly altered this situation, increasing uncertainty regarding the future direction of energy prices.