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The European steel industry is set to continue its modest recovery in 2022, although high energy prices and uncertainty are expected to remain a risk until at least mid year, The European Steel Association, or Eurofer, said in a Feb. 4 statement.
The European Union’s apparent steel consumption rose 14.3% year on year to 36 million mt in the third quarter of 2021, the fourth straight quarter of year-on-year increases, although it was down from 40 million mt in the second quarter, Eurofer said.
The association expects steel consumption to grow by 3.2% year on year in 2022 and 1.7% on the year in 2023 after rebounding 13.8% in 2021, it said, adding that demand from consumer sectors, especially the automotive industry, were expected to be hit by global supply chain issues and rising energy prices until at least Q2 2022.
“The positive trend in steel-using industries and in steel demand observed since the end of 2020 continues, but the outlook is becoming gloomier,” Eurofer Director General Axel Eggert said.
He added that ongoing supply chain disruptions, high energy and carbon prices and persisting inflation were all factors that put the recovery of the steel sector at risk.
“Combined with the current EU climate and energy policies, these are the ingredients of a dangerous cocktail that may drive Europe to a structural crisis and industry out of Europe,” he said.
Steel imports continue to climb
While domestic deliveries of steel in the EU rose 6.6% on the year in Q3 2021 after a two-year decline, which was much lower than the 40% recovery seen in Q2, EU steel imports continued to climb, rising 45% year on year in Q2 and 47.7% in Q3.
“Although reflecting the comparison with the exceptionally low figures (-17.1%) of 2020 due to the pandemic, import penetration proves to be considerably high,” Eurofer said.
EU steel-using sectors’ output grew by only 3.2% year on year in Q3, compared to a recovery of 29.2% in the previous quarter due to the global supply chain pressures experienced from July 2021, particularly on the automotive industry, the association said.
“The current situation jeopardizes the recovery and casts substantial uncertainty on the overall steel-using industries’ outlook, at least until the first half of 2022,” Eurofer said.
According to the World Steel Association, the EU produced 152.5 million mt of crude steel in 2021, up 15.4% year on year, making up 8% of total global output.
-- Jacqueline Holman
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