European Union metals lobby Eurofer on Friday released a report pointing to a sharp slowdown in steel demand growth in Europe due to logistical problems and rising energy prices, which are holding back industrial activity, especially in the automotive sector.
Europe's apparent steel demand, which takes into account the output of steel producers plus net imports less net exports, is projected to rise by 3.2% in 2022 after an expected 13.8% growth last year. In 2023, demand growth is forecast to be even lower, at 1.7%.
"Continuous supply chain disruptions, skyrocketing energy and carbon prices, and persistent inflation threaten the recovery of the steel sector," said Axel Eggert, CEO of Eurofer. He added that these factors will have a significant impact on demand from sectors using steel, at least until the second quarter of this year.
Europe's largest automaker Volkswagen reported its lowest sales figures in 10 years in 2021, and said last month that it expects supply chain conditions to remain volatile in the first half of this year.
Eurofer released data for the third quarter of 2021 showing that steel demand in the EU rose by 14.3% year on year to 36 million tons, compared with a jump of 40.9% in the previous quarter. Steel imports grew by 47.7% in the third quarter.
Last year, steel demand in Europe began to grow after a disastrous 2020, when it fell by 10.7% due to the COVID-19 quarantine.