The current trend in EU apparent steel consumption continues to mirror weak demand conditions that emerged in the second quarter of 2022 due to war-related disruptions and rising energy prices and production costs. This negative cycle has persisted to date, mainly as a result of growing global economic uncertainty, higher interest rates – before eight policy rate cuts were implemented - and overall manufacturing weakness, now also exposed to the volatility and risks arising from U.S. tariffs.

The consequences of the conflict in Ukraine and the energy shock on steel-using industries, along with worsened overall economic outlook, triggered a severe recession (-8%) already in 2022. These protracted downside factors further impacted apparent steel consumption, resulting in two other consecutive annual drops in 2023 and 2024 (-6% and -1%, respectively). In 2025 apparent steel consumption is set to decline again, albeit more moderately than in previous years (-0.2%, unchanged from our previous outlook). This will be driven by the expected—albeit difficult to quantify—impact of U.S. tariffs and the resulting uncertainty and trade-related

In 2026, apparent steel consumption is projected to finally recover (+3%, marginally revised from +3.1%), conditional on a positive evolution of the industrial outlook and an easing of global tensions, both of which remain unpredictable at this stage.

The overall evolution of steel demand remains subject to very high uncertainty. No improvement in apparent steel consumption is expected before the first quarter of 2026, and consumption volumes are expected to remain far below pre-pandemic levels.

EU steel market overview

In the second quarter of 2025, apparent steel consumption fell year-on-year (-1.8%), reversing the two preceding quarterly increases (+2.2% in the first quarter) that largely reflected comparison with the exceptionally low historical levels recorded a year earlier. Total consumption volume in the second quarter of 2025 stood at 34.3 million tonnes.

In the same period, domestic deliveries mirrored the evolution of demand and decreased year-on-year (-1.6%, after an increase of +1.3% in the preceding quarter). In 2023, they markedly dropped (-4.6%) and continued to decline in 2024 (-2.8%), reflecting persistently weak steel demand.

Imports into the EU - including semi-finished products – decreased (-3.3%) in the second quarter of 2025 after a marginal drop in the preceding quarter (-0.3%), but overall, in the first eight months of 2025, they slightly increased (+0.3%). It is worth noting that the share of total imports out of apparent consumption has even increased from the already high historical levels up to the second quarter of 2025, standing at 27% (25% in the preceding quarter). In 2024, the share of imports stood at 27%.

EU steel-using sectors

In the second quarter of 2025, the Steel Weighted Industrial Production index (SWIP) dropped for the sixth consecutive time (-0.9%, after -3.2% in the preceding quarter). Until the end of 2023, EU steel-using sectors’ output continued to show resilience and grow, albeit at a slower pace, despite the prolonged impact of Russia’s invasion of Ukraine, overall manufacturing weakness and global geopolitical tensions - with trade-related issues growing more recently – weighing on industrial confidence and business investment.

The positive trend in overall SWIP, started after the pandemic, continued up to the fourth quarter of 2023, in spite of soaring energy prices impacting production costs, component shortages and lower output that began to take their toll on total production activity in steel-using sectors in the second half of 2022. The deterioration of the economic and industrial outlook in the EU – particularly due to high inflation and the subsequent interest rate hikes by the European Central Bank (ECB) – had only a limited impact on steel-using sectors’ output up to the end of 2023, with the exception of the construction sector.

As the industrial and economic landscape in the EU turned even gloomier throughout 2024, the evolution of the SWIP index has reflected a continued downturn in the construction, mechanical engineering, domestic appliances and metalware sectors—and particularly in the automotive industry, is most exposed to volatility in global trade and supply chain disruptions.

Due to U.S. tariffs – both announced and implemented - ongoing economic uncertainty is likely to intensify, weighing on growth also in the coming quarters. This is expected despite monetary easing by the ECB, which implemented eight consecutive 25 bps policy rate cuts between 2024 and 2025, whose effects are not visible in the short-term.

Conclusions

The ongoing economic uncertainty is set to continue affecting steel market growth from the demand side over the upcoming quarters:

1. Output in steel-using sectors in the EU has been contracting throughout 2025, mainly driven by declines in the construction and automotive sectors. The outlook for the rest of 2025 and 2026 remains overshadowed by a worsening combination of very high tariff-related uncertainty, weak conditions in manufacturing sectors – and consequently lacklustre steel demand - severe geopolitical tensions, and broader economic challenges. Notwithstanding repeated monetary easing in the euro area, its effects on the economic cycle will not be visible in the short-term.

2. In 2024, growth in steel-using sectors declined more than expected (-3.6% vs. -3.3%), primarily due to the recession in the two largest steel-consuming sectors—construction and automotive. Persistent geopolitical tensions and the delayed effects of monetary easing weighted on the overall manufacturing sector.  

3. Another contraction, albeit milder, is expected in 2025 (-0.5%, revised slightly upwards from -0.7%), particularly due to the expected contraction in output in the automotive sector (-3.8%) and marginal growth in construction output (a mere +0.1%), which is set to only partly benefit from continued monetary easing and from ongoing public support linked to NextGenerationEU schemes. SWIP is then projected to recover modestly (+1.8%) in 2026.