The EU steel industry is losing ground in the global market

Between 2018 and 2024, the European Union’s steel industry underwent significant changes. After a decline in production in previous years, 2024 was marked by a slight recovery. However, despite this, the production capacities of key producing countries remain underutilized, indicating remaining structural problems in the sector.

Last year, EU steelmakers produced 129.5 million tons of steel, up 2.5% from 126.3 million tons in 2023. Despite the growth, production volumes remain significantly lower than in previous years. In particular, in 2018-2022, the average annual steel production amounted to 149.48 million tons.

Most countries in the bloc showed improved production results in 2024, driven by stabilized energy prices, an improved economic situation in the EU and growing demand for steel in key sectors. However, capacity utilization in key producing countries, including Germany, Italy, Spain and France, did not exceed 75%.

One of the main obstacles for European steelmakers is the implementation of the carbon border adjustment mechanism (CBAM). EUROFER, the European steel association, emphasizes the need to urgently improve and launch CBAM, stressing that without proper adjustment, this mechanism could negatively affect the competitiveness of the European steel industry. The association calls for a level playing field for European producers and their international competitors.

An additional challenge is the strict regulation of greenhouse gas emissions in the EU. Recently, the European People’s Party has launched an initiative to simplify climate policy, in particular, to abolish mandatory renewable energy targets and reduce the administrative burden on businesses. This, in their view, will help increase the competitiveness of the European economy and support industry.

The problem of market saturation with imported steel also remains relevant. EUROFER is calling for a 50% reduction in import quotas for flat products to protect the domestic market from excessive imports and support local producers.

In addition, the significant export of ferrous scrap from the EU creates additional challenges for the industry. EUROFER and European Aluminium draw attention to the problem of scrap leakage that could be used for recycling within the EU, contributing to reducing emissions and supporting the circular economy. They call on the European Commission to take measures to limit scrap exports to third countries that themselves limit exports of their critical raw materials.

Forecasting the future, experts point to the need for structural reforms and adaptation to new market conditions. It is expected that the introduction of innovative technologies aimed at decarbonizing production, as well as support from the EU, can contribute to the gradual recovery of the industry. However, without proper attention to these problems and timely response to challenges, the European steel industry risks losing its position in the global market.

“Brussels is now facing a very significant challenge: whether to turn its economic policy towards the traditional industrial direction with the support of new technologies (which is what Trump is doing now), or to live in the past and do nothing, watching production facilities close and relocate to other countries. Unfortunately, it looks like the 152 million tons of steel production in 2021 will be a thing of the past. No trade barriers will support local steel production without a fundamental change in economic policy and approaches to economic management. A service economy cannot exist without a real manufacturing sector! Renovation and development of the EU’s residential, transportation and energy infrastructure cannot be carried out using imported steel. Although Brussels may think differently…” comments Stanislav Zinchenko, CEO of GMK Center.