The production activity of German steel and metal producers has not increased so far this year, although January and February were at the level of the corresponding months of 2025, according to their association WSM.
The initially stable year-on-year activity was somewhat of a relief, given that the industry had experienced a four-year recession. But in March, prices fell by 5.6% compared to the same month last year. Overall, there was a 2.3% drop in the first quarter compared to the same period last year. This decline, at least in part, should be attributed to the conflict in the Middle East, the association explains.
More encouraging was the data on incoming orders, which increased by 1.6% in the first quarter, and more recently, in March, increased by 6.7%. Although this contradicts the explanation for the drop in production, the conflict in the Middle East has so far caused mainly supply problems for production and has not necessarily hindered orders, says Holger Eid, chief economist at Kallanish.
An increase in orders is not necessarily a signal for sustained optimism, he notes. According to the survey, there was indeed a more positive mood in business circles in April than in the previous month, and this was the first increase in optimism compared to the previous month since September. This is confirmed by the higher level of production capacity utilization, which increased by 3 percentage points to 75%.
However, the outlook for the next six months has become somewhat more gloomy than in the previous review. Ade explains this apparent contradiction by concern for profitability. Although businesses have noted a slight increase in orders and downloads, they are concerned about rising production costs, he says.
Author: Christian Kel
Kallanish.com
