According to the report Economic and Steel Market Outlook for 2026-2027, prepared by the Economic Committee of the European Steel Manufacturers Association (EUROFER), steel consumption in the EU in the first quarter of 2026 increased by 1.5% year-on-year and reached 34.4 million tons.
However, the forecast for 2026 has been revised downwards. EUROFER expects the market recovery to slow down due to weak industrial demand, unstable geopolitical environment and ongoing supply chain problems. Now the association predicts an increase in apparent steel consumption of only 0.1% to 135 million tons. Previously, an increase of 0.4% was expected.
EUROFER estimates that the dynamics will improve in 2027: steel consumption may grow by 2.3% and reach 138 million tons. At the same time, production volumes will still remain about 7 million tons below the pre-pandemic level.
Real steel consumption also increased by 1.6% in the first quarter of 2026, following an 11.5% increase in the fourth quarter of 2025.
Production and capacity utilization remain weak
The output of crude steel in the EU decreased to 125.8 million tons in 2025, which is 2.9% less than a year earlier. In May 2026, production increased by 1.1% year-on-year, but the overall background in the industry remains difficult.
EUROFER attributes the decline to weak demand from steel-consuming industries, as well as high energy and production costs compared to other large steel-producing regions.
Capacity utilization increased to 67% in May 2026 against an average of 65% in 2025, but historically this figure remains low.
A gradual recovery is expected in the steel sectors.
Demand in steel-consuming industries, which EUROFER estimates through the steel-weighted Industrial Production Index (SWIP), is expected to grow by 1.5% in 2026. For comparison, in 2024, the indicator decreased by 4.1%, and in 2025 — by 0.1%.
The largest consumer of steel in the EU, the construction sector, is forecast to add 1.8% in 2026. Production in the mechanical engineering industry is expected to grow by 1.9%, while the automotive industry, on the contrary, will decrease by another 0.9%.
According to the association, SWIP growth will accelerate to 2.5% in 2027 due to the restoration of construction by 2.9%, mechanical engineering by 1.8%, and the automotive industry by 3.5%.
EU economy shows resilience despite geopolitical tensions
EUROFER notes that the EU economy remains stable despite the tensions in the Middle East, but this has not yet led to a noticeable revival of industry.
EU GDP grew by 1.2% year-on-year in the second quarter of 2026, following an increase of 0.8% in the first quarter. Over the same period, real GDP increased by 0.9% in Germany, 0.7% in France, 1% in Italy and
