Jul 26, 2023
EU steel demand to slide 3% in 2023; industry group cuts outlook
2023-08-04
LONDON, July 26 (Reuters) - Steel demand in the European Union is expected to slide 3% this year amid persistently high energy prices and sluggish demand, the European Steel Association (Eurofer) said on Wednesday, downgrading its outlook.
In May, the industry group said steel consumption was due to decline by 1% in 2023, but lingering uncertainty meant that the prospects for this year have deteriorated, a statement said.
“The European steel industry has been navigating through numerous challenges for a long time now, from the pandemic to the energy crisis and other ongoing disruptive factors," said Eurofer Director General Axel Eggert.
The EU steel sector produces about 152 million metric tons of steel per year at about 500 sites with turnover of 130 billion euros ($144.04 billion).
The decline of apparent steel demand in 2023 would mark the fourth negative performance in the past five years, the group said.
Apparent steel demand measures steel output plus imports net of exports and incoming material being further processed in the bloc.
Eurofer, however, was more optimistic about 2024, upgrading its forecast to a rise in demand of 6.2% from the 5.4% estimate in May.
In the first quarter - the most recent actual data available - steel consumption crumbled 11.7% year-on-year to 34.5 million metric tons, an improvement over the 19.3% drop in the final quarter of last year, a statement said.
Output in steel-using sectors such as auto, transport and construction is expected to slow to growth of 1.3% this year from a rise of 3.1% in 2022, Eurofer said.
"The rest of 2023 is expected to be characterised by a combination of uncertainty in energy prices, low industry demand and inflation-driven economic challenges," the report said.
Total steel imports tumbled 28% year-on-year in the first quarter due to the weak demand, but the share of imports compared to consumption was 22%, which is high in historical terms, it added.
($1 = 0.9025 euros)
Reporting by Eric Onstad; Editing by Sharon Singleton
