The current trend in EU apparent steel consumption, despite two modest consecutive rebounds over the last two quarters – driven by comparison with very low volumes recorded a year earlier – continues to reflect weak demand conditions. These conditions originated in the second quarter of 2022 due to war-related disruptions, coupled with unprecedented increases in energy prices and production costs. This negative cycle has persisted until the third quarter of 2024, mainly as a result of growing global economic uncertainty, higher interest rates – before eight policy rate cuts were implemented - overall manufacturing weakness, and growing uncertainty surrounding 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 -1.1%, respectively). In 2025, contrary to earlier expectations of a more favourable industrial outlook and improving steel demand, apparent steel consumption is set to decline again, albeit more moderately than previously foreseen (-0.2%, formerly -0.9%). This will be driven by the expected—albeit difficult to quantify—impact of U.S. tariffs and the resulting uncertainty and trade-related disruptions. In 2026, apparent steel consumption is projected to finally recover (+3.1%, previously set at +3.4%), conditional on a positive evolution of the industrial outlook and an easing of global tensions, both of which remain unpredictable at this stage.

Apparent steel consumption is set to experience another drop (-0.2%, more moderate than the previously forecasted, -0.9%). In 2026, apparent steel consumption is finally projected to rebound (+3.1%, formerly +3.4%), conditional on a positive evolution of the industrial outlook and easing trade and global geopolitical tensions, which all are unpredictable at the moment. The overall evolution of steel demand remains subject to very high uncertainty. Apparent steel consumption is not expected to improve substantially before the first quarter of 2026, and consumption volumes are expected to remain far below pre-pandemic levels.

EU steel market overview

In the first quarter of 2025, apparent steel consumption increased year-on-year (+2.2%) for the second time in a row (+0.5% in the preceding quarter, after three consecutive quarterly drops). Total consumption volume in the first quarter of 2025 stood at 33.8 million tonnes. 

Domestic deliveries mirrored the evolution in demand and increased year-on-year (+1.4%, after -2% in the preceding quarter). In 2024, they decreased overall (-2.8%), reflecting persistently weak steel demand.

Imports into the EU - including semi-finished products – slightly decreased (-0.6%) in the first quarter of 2025, after a marked rise in the preceding quarter (+6.3%). It is worth noting that in absolute volumes the share of total imports out of apparent consumption has remained considerably high in historical terms up to the first quarter of 2025, standing at 25% (27% in the preceding quarter). In the entire year 2024, the share of imports stood at 27%. Over the second quarter of 2025, total imports continued to decrease (-3%).

EU steel-using sectors

In the first quarter of 2025, the Steel Weighted Industrial Production index (SWIP) sharply dropped for the fifth consecutive time (-3.2%, after -4.6% 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 emerging 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, which 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, the effects of which will not be fully visible in the short-term.

Despite persisting downside factors, steel-using sectors’ output continued to grow in 2023 (+1.7%, revised from +1.6%), albeit with wide differences across individual European economies and sectors. This was largely driven by the better-than-expected performance of the construction sector in some EU countries. However, SWIP resilience came to an end in 2024, and steel-using sectors’ output growth contracted on a yearly basis (-3.6%, revised from -3.7%). This was mainly due to drops in construction and automotive output (-2% and -9.8%, respectively). Due to growing uncertainty following U.S. tariff announcements, another recession—albeit a more moderate one— is anticipated in 2025, (-0.7%, formerly -0.5%), before a moderate rebound (+1.8%) in 2026.

Conclusions

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

1. Despite EU industry proving quite resilient throughout 2023, output in steel-using sectors in the EU contracted in 2024, mainly driven by declines in the construction and automotive sectors. The outlook for 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. While output grew more than expected (+2.9%) in 2022, in 2023 SWIP growth slowed down (+1.7%), albeit with wide differences among individual EU economies and industrial sectors. In 2024, growth in steel-using sectors declined more sharply than previously estimated (-3.6% vs. -3.3%), primarily due to the recessions 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 (-0.7%, slightly revised downwards from -0.5%), particularly due to the expected contraction in output in the automotive sector (-4.2%) and the very low growth in construction output (+0.4%), which is set to only partly benefit from continued monetary easing. SWIP is then projected to recover modestly (+1.8%, formerly +1.3%) in 2026.