Steel demand in Germany is facing a severe downturn, as the national steel federation, WV Stahl, announces a significant revision to its earlier forecasts. Initially, in April, the federation anticipated a slight growth in steel demand for this year. However, current assessments reveal a grim outlook, projecting a year-on-year decrease of 7% in 2024. Following this decline, a modest rebound of 6% is expected in 2025, which contrasts sharply with the global forecast of a 0.9% decline in steel demand for the same year.
Martin Theuringer, director of WV Stahl and chairman of the worldsteel economics committee, has expressed deep concern over the market's trajectory. He stated, “There is no sustained recovery in sight for 2025,” highlighting that the anticipated drop in market volume will result in a total of only 26 million metric tons of steel demand. This figure represents a troubling low, undercutting even the levels experienced during the financial crisis by 10%.
The downturn in demand is not isolated to a single sector; nearly all major steel-consuming industries in Germany are currently stagnant. Theuringer describes the expected recovery in 2025 as merely a “technical counter-movement,” indicating that it will not be robust enough to restore the losses experienced in 2024. This stagnation has been compounded by a troubling trend: since 2017, Germany’s steel market has contracted by 35%, a rate more than double that observed in the entire European Union.
Interestingly, while Germany's crude steel output has shown a slight year-on-year increase in recent months, this upturn is largely attributed to a low production base in mid-2023. The underlying reality remains that the overall demand for steel is waning, raising alarms about the health of the industry. The increase in output is not indicative of a recovery but rather reflects temporary fluctuations in production levels.
The broader implications of this decline are concerning for Germany, which has long been regarded as Europe's industrial powerhouse. Theuringer emphasizes that without urgent political interventions, the downtrend in the steel market is unlikely to reverse. He advocates for strategic measures to stabilize the industry and revive demand.
Germany’s steel sector is critical not only for its economy but also for its role in supplying materials to various industries, including automotive and construction. The prolonged downturn may hinder investment and innovation within these sectors, further exacerbating the challenges faced by the steel industry.
As the situation evolves, the need for targeted policies and measures to support the steel sector becomes increasingly urgent. Stakeholders in the industry are left grappling with uncertainties, while the outlook for recovery remains bleak amidst a challenging economic landscape.
