The global steel industry is grappling with one of the worst crises it has ever faced, with demand plunging significantly in the wake of the energy crisis and the ongoing war in Ukraine. According to EUROFER, 2022 ended with a sharp drop of 7.2% in apparent steel consumption in EU, a trend that is expected to continue in 2023, albeit at a slower pace of minus 1%.
Domestic deliveries fell dramatically by 15.2%, leading to an overall annual decrease of 8% in 2022. Imports into the EU also shrank in the last quarter of 2022 by 32.5%, resulting in an overall annual decrease of 6.6%. However, the market share of imports remained high, even at the end of 2022 at 23.5%.
Despite these gloomy figures, steel using sectors displayed more robust than-projected resilience, ending 2022 with positive growth. The automotive industry and the construction sector posted steady performances, with growth rates of 3.3% and 4.8%, respectively. However, there are glimmers of hope as the worst seems to be over, with a rebound predicted in 2024.
Despite these challenges, the steel industry is working tirelessly to recover, but the conditions are far from conducive. Energy prices, production costs, and inflation remain stubbornly high, while decarbonization projects are still in their infancy.
Industrial energy consumers such as the steel sector are critical to achieving net-zero in the European Union, but the majority of EU provisions do not account for their role. The steel industry needs access to affordable fossil-free electricity if it wants to transition to a low carbon future while remaining competitive at a global level.
However, the ongoing challenging circumstances are expected to take a toll on these sectors, resulting in modest output (+0.6%) in 2023, before gaining some momentum again in 2024.
Source: SteelGuru
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