EU steel demand is showing signs of stabilisation after three consecutive years of contraction, but the recovery remains modest and uncertain. Even with expected growth in 2025–2027, consumption levels will remain well below pre-pandemic levels. At the same time, import penetration has reached record highs, underscoring the structural pressures facing the European steel market.

Recent developments and outlook

Contrary to earlier expectations of a further marginal decline, the industrial outlook has slightly improved in 2025 and steel demand has shown signs of stabilisation, particularly in the second half of the year. However, this largely reflects comparison with very weak volumes recorded in the second half of 2024. As a result, apparent steel consumption in 2025 is expected to rebound by +2.4% compared with a -0.2% decline in the previous outlook. This will be driven by stronger-than-expected growth in some national markets, which will partly offset the impact of trade disruptions including those caused by the U.S. tariffs.

On the supply side, EU crude steel production fell to a new record low in 2025, reaching 125.8 million tonnes compared with 130 million tonnes in 2024, a year-on-year decline of around 3%.

This reflects the continued downsizing of the European steel industry and persistently low capacity utilisation, driven by weak demand in recent years and increasing pressure from imports.

EU steel market overview

In the third quarter of 2025, apparent steel consumption increased year-on-year by +4.6%, following two consecutive quarterly declines (-1.7% in the preceding quarter). This increase largely reflects comparison with unusually low volumes recorded on year earlier, as well as higher-than-expected demand in some national markets. Total consumption volume in the third quarter of 2025 stood at 32 million tonnes.
Domestic deliveries broadly mirrored the evolution of demand and increased year-on-year by +3.4%, in the third quarter of 2025, following a decline of -1.6% in the previous quarter. In earlier years, domestic deliveries had declined sharply (-4.6% in 2023 and -2.8% in 2024), reflecting persistently weak steel demand.

Imports into the EU, including semi-finished products, increased sharply (+10%) in the third quarter of 2025, after declining in in the previous quarter (-3.2%). As a result, the share of imports in EU apparent steel consumption reached a record-high level of 29%, compared with 25% in the preceding quarter. Over the entire year 2024, the share of imports stood at 27%.

EU steel-using sectors

In the third quarter of 2025, the Steel Weighted Industrial Production index (SWIP) increased by +1.8%, following six consecutive quarterly drops (-0.7% in the second quarter). Until the end of 2023, EU steel-using sectors had continued to show resilience and growth, albeit at a slower pace, despite the prolonged impact of Russia’s invasion of Ukraine, manufacturing weakness and geopolitical tensions weighing on industrial confidence and business investment.

Despite monetary easing in the course of 2024 as the European Central Bank reversed its earlier tightening in response to record-high inflation in the second half of 2022, developments in the SWIP index continued to reflect a downturn in the mechanical engineering, domestic appliances and metalware sectors, and particularly in the automotive industry, which is most exposed to global trade and external shocks.

By contrast, the construction sector has shown some signs of recovery since the second quarter of 2025. In the third quarter of 2025 there were signs of some improvement in manufacturing activity and in steel-using sector output reflecting modest improvements in leading industrial indicators and the delayed effects of low interest rates.

Conclusions

After proving resilient over the two previous years, SWIP experienced recession in 2024 (-3.5%). This decline was mainly driven by reductions in construction and automotive output (by -1.6% and -9.6% respectively). Due to growing uncertainty following U.S. tariff announcements, another recession, albeit more moderate, is anticipated in 2025 (-0.3%, compared with the previously expected -1.5%), despite recovery in the construction sector (+0.7%). This reflects further contractions in automotive and in mechanical engineering output (-4.3% and -0.8% respectively).

A moderate rebound in SWIP growth is expected in 2025 (+1.9%, revised from +1.6%), followed by some acceleration in 2027 (+2.2%), supported particularly by growth in construction output and recovery in automotive output.