OECD: EU steel demand is expected to recover gradually from 2026
SteelOrbis spoke with Luciano Giua, an economist and policy analyst at the Organization for Economic Cooperation and Development (OECD), about the latest developments in the EU steel market.
How would you describe the current trends in steel demand in the EU steel market in the main sectors (construction, automotive, mechanical engineering, etc.)?
Demand in most major EU economies remains weak, reflecting lower construction activity, lower car production, and low production orders. Germany, France and Spain are declining, while Italy is showing moderate resilience related to construction demand.
How do high energy prices affect output, investment, and competitiveness?
High electricity and gas prices continue to put pressure on production, profitability and investment potential. Compared to manufacturers in the Middle East and North Africa, which benefit from energy subsidies, EU plants face a clear cost disadvantage, which reduces competitiveness.
How do geopolitical changes affect trade routes?
In the EU, stricter safeguards and the introduction of CBAM have tightened import conditions and supported prices, despite weak demand and high costs putting pressure on the sector. All over the world, Chinese exports are changing trade routes, and flows are increasingly being redirected to less secure markets in Asia, Africa, and Latin America.
What are your expectations regarding steel demand and prices in the short and medium term?
Steel demand in the EU is expected to remain weak until 2025, but will stabilize as conditions improve, with a gradual recovery expected from 2026 through infrastructure and defense spending.
Are you optimistic or cautious about the competitiveness of the EU steel sector in the medium term?
Carefully. Declining profitability, high energy and loan costs, and limited investment potential all have a negative impact on competitiveness in the medium term, despite some improvements in the region.
How do you see the balance between environmental goals and global competitiveness?
Our recent analysis shows that this remains a difficult task: constant price pressures and low profitability reduce decarbonization investments, while producers in regions with subsidized energy maintain competitive advantages.
Steelorbis.com