The German Steel Federation (WV Stahl) has announced that crude steel production in Germany totaled 34.1 million mt in 2025, one of the lowest levels recorded, also seen during the 2009 global financial crisis, since reunification of Germany. Capacity utilization fell below 70 percent, a level regarded as critical for the energy-intensive steel sector.
For the fourth consecutive year, production remained well below the 40 million mt threshold considered necessary for adequate utilization of installed capacity. Since 2018, this benchmark has been missed six times, underlining that the industry continues to operate under recessionary conditions.
Weak demand and persistent structural pressures
Demand conditions remained subdued throughout the year. Based on preliminary data through October 2025, apparent steel consumption in Germany is estimated at around 30 million mt for the full year, again below the already depressed average of recent years.
According to WV Stahl, the weak performance reflects deep-seated structural pressures. Kerstin Maria Rippel, CEO of WV Stahl, stated that historically weak demand, sustained import pressure and internationally uncompetitive energy prices are converging on the industry simultaneously. While policy responses have been discussed at both German and EU level, she warned that implementation has yet to materialize and stressed that 2026 must be decisive for safeguarding Germany’s industrial base amid rising geopolitical tensions.
Import pressure and trade defense concerns
Import pressure remains a major concern for the EU steel market. Roughly one-third of steel consumed in the EU now originates from outside the bloc, driven by global overcapacity, particularly in Asia, and compounded by volatile US trade policy.
Against this backdrop, Rippel cautioned that recovery prospects for 2026 remain limited unless the European Commission rapidly enacts a robust and effective trade defense instrument to curb imports and address market distortions.
Energy costs undermine competitiveness and transition
Energy costs continue to be a critical location factor for the German steel industry. WV Stahl argues that current electricity prices are not only eroding competitiveness but also slowing the sector’s transition toward climate-neutral production.
Rippel reiterated that the medium-term objective should be an internationally competitive industrial electricity price of 3-6 cents per kilowatt-hour, inclusive of network charges, taxes and levies. She highlighted permanent reductions in grid fees, continued electricity price compensation and the ability to combine compensation schemes with an industrial power price as key measures.
Lead markets seen as key lever for recovery
Looking ahead, WV Stahl sees growth potential in the development of lead markets for low-emission steel produced within the EU. At national level, reform of public procurement rules is viewed as a crucial lever to mandate the use of lower-emission materials in publicly funded projects. At EU level, content requirements could further stimulate demand.
Rippel pointed to the forthcoming Industrial Accelerator Act as an opportunity to generate targeted demand in steel-using sectors, emphasizing that lead markets only emerge where climate-friendly steel is reliably purchased.
December and full-year production figures
According to data released by WV Stahl, Germany’s crude steel output in December 2025 declined by 0.2 percent year on year to 2.74 million mt. For the full year, crude steel production fell by 8.6 percent year on year to 34.09 million mt.
Pig iron output in December amounted to 1.98 million mt, down 3.1 percent year on year, while full-year pig iron production decreased by 10.1 percent to 21.87 million mt.
Hot rolled steel output rose by 8.3 percent year on year in December to 2.26 million mt, but declined by 5.5 percent year on year over the full year to 29.76 million mt.
