German Steel Federation Highlights Persistent Struggles in 2024
The German Steel Federation, or Wirtschaftsvereinigung Stahl, WV Stahl, has outlined the ongoing challenges confronting the country’s steel industry, which has experienced another year of subdued production levels. In its report covering December 2024 and the full year, the federation noted that Germany’s crude steel production remained below the 40 million metric ton threshold for the third consecutive year. This was largely attributed to weak demand in the domestic market, combined with external pressures such as cheap steel imports and high energy prices.
Kerstin Maria Rippel, the general manager of WV Stahl, emphasized the warning signs for the industry, noting that persistently low production and economic weakness are major concerns. According to Rippel, the surge in low-cost steel imports, particularly from countries like China,coupled with escalating energy costs, is threatening the viability of domestic steelmakers. She urged the German government to take swift action, such as reinstating network fee subsidies amounting to €5.5 billion, to help support the sector during its crisis.
Economic Uncertainty and Weak Investment Conditions
The situation appears bleak for the steel industry as Dr. Martin Theuringer, managing director and chief economist at WV Stahl, pointed out that there are no indications of significant economic recovery in the immediate future. He warned that investment demand remains weak in Germany, and foreign trade risks, including trade policy changes in the US and economic instability in China, further exacerbate the challenges faced by the steel sector.
Theuringer also pointed to the increasing inflow of cheap Chinese steel imports as a major contributor to the downturn in the domestic steel industry. For the industry to recover, Theuringer stressed the need for new impulses, particularly focusing on investment conditions that would make Germany a more attractive place for steel producers to operate.
Operational Results: December and Full Year of 2024
Despite the overall tough environment, there were some signs of production improvement in specific categories. In December 2024, Germany’s crude steel production rose by 4.1% year on year, reaching 2.74 million metric tons. However, despite this uptick in December, total crude steel output for the year remained below the 40 million metric ton mark, standing at 37.23 million metric tons, a modest increase of 5.2% compared to the previous year.
Germany’s pig iron production showed more promising results, with output increasing by 5.4% in December, reaching 2.05 million metric tons. For the full year, pig iron production saw a 2.9% rise, totaling 24.33 million metric tons.
However, not all sectors saw growth. Hot rolled steel production faced a decline in December, dropping by 7.5% year on year to 2.09 million metric tons. Despite this, the total hot rolled steel output for 2024 increased by 3% compared to the previous year, totaling 31.61 million metric tons.
Challenges Ahead for the German Steel Sector
While Germany’s steel industry showed some gains in production, the underlying economic conditions remain a serious concern. Weak domestic demand, combined with high energy prices and the influx of cheap steel imports, means that the sector continues to operate in a challenging environment.
WV Stahl's calls for government intervention underscore the need for a coordinated response to ensure the survival and competitiveness of Germany's steel industry. The reintroduction of subsidies, a focus on improving investment conditions, and measures to address unfair import competition are seen as crucial to revitalizing the sector in the years to come.
With the steel industry facing multiple pressures, the need for strong policy support has never been more urgent. Whether the German government can implement the necessary measures in time will determine the future of the steel sector, and its ability to compete on the global stage.
