The consumption of steel products in the EU will decrease by 3.5% in 2022 – EUROFER

The Association of European Steel Producers (EUROFER) has downgraded its market forecast for the second half of 2022 and 2023. The organization’s website reports about it.

The economic downturn in the EU after the full-scale invasion of the Russian Federation in Ukraine and the energy crisis led to a recession, which will seriously affect the industrial sectors. Prospects for the steel market worsened both in the second half of the current year and in the next.

In the second quarter of 2022, the consumption of steel decreased by 4.8% compared to the same period last year – to 38.6 million tons.

It is expected that the consumption of steel products in the European Union will fall by 3.5% in 2022 compared to the previous year, and by 1.9% in 2023. In August, the association expected a decrease in consumption of steel products by 1.7%.

“All downside factors have remained in place and even exacerbated, especially skyrocketing energy prices, which lead to unbearable production costs. This has entailed a further cut in apparent steel consumption and a significant downward revision of steel-using sectors’ output in the EU for the remainder of this year and supposedly for the first half of next year,” noted Axel Eggert, CEO of EUROFER.

Axel Eggert also notes that in this situation, the high level of distorting imports of steel products into the EU is cause for concern. According to him, there is a risk of coming close to a significant destruction of European industrial potential, if extraordinary trade measures are not taken in response to the unstable situation in some critical industries.

Imports to the EU, including semi-finished products, continued to increase in the second quarter as well, despite weak demand, although at a significantly lower pace compared to the first quarter (by 1.6% compared to 28.5% in the first quarter of 2022).

As GMK Center reported earlier, in 2022 world steel consumption will fall by 2.3% compared to 2021 – to 1.796 billion tons. This assessment was given by the World Association of Steel Producers, in its short-term forecast. In 2023, steel demand is expected to increase slightly thanks to the infrastructure sector by 1.0% – to 1.814 billion tons.