The European Steel Association Eurofer said on Feb. 2 that it expects steel consumption to fall sharper in 2022, following third-quarter data that confirmed and deepened negative trends seen in the second quarter, with consumption continuing to fall in 2023, albeit at a slower pace.
In its latest economic and steel market outlook report, Eurofer said it now expects steel consumption to fall by 4.6% in 2022, compared to a 3.5% fall, which was recorded in the previous forecast.
Consumption is expected to decline by another 1.6% in 2023, slightly less than the previous forecast of a fall of 1.9% for the year.
According to the association, all the negative factors that materialized in the first half of 2022 have remained, and a further fall is expected in the fourth quarter of 2022 and at least until the first half of 2023. As a result, 2023 will be the fourth year of decline in steel demand over the past five years.
Steel demand is then expected to recover by 1.6% in 2024, although uncertainty remains and the recovery will continue dependent on energy price dynamics, the Russian-Ukrainian war and their impact on inflation and global supply chains, according to Eurofer.
“We are seeing what we have been warning about in recent months: energy crises, inflation, problems with supply chains, the unprecedented costs of decarbonization, combined with massive cheap imports from third countries, is a toxic cocktail for the industry,” said Eurofer CEO Axel Eggert.
Eggert explained that in order to achieve success, the energy transition should lie and demand for low-carbon steel in the EU should rise.
“The consequences of high energy prices, the continuation of the war in Ukraine and the associated disruptions will continue and become even worse in the first half of 2023,” Eurofer said in a statement.
“The overall evolution of steel demand remains subject to very high uncertainty anyway, which is likely to continue to undermine demand from steel-using sectors, at least in the first half of 2023,” it said.
However, a gradual recovery of 1.6% is expected in 2024 if the positive scenario is confirmed and confidence returns.