Alexander Siryk: EU steel demand to decline in 2023 despite better economic outlook

At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Thursday, April 27, in cooperation with SteelOrbis, Alexander Siryk, chief executive officer at Metals Consulting International (MCI), shared his evaluations regarding EU economic and steel trends in his presentation.

Noting that steel demand in the EU-27 amounted to about 143 million mt in 2022, decreasing by 7.4 percent year on year, despite the 3.7 percent regional economic growth rate, Mr. Siryk stated that steel demand in the EU is expected to fall to 142 million mt in 2023 with a better GDP growth outlook of 0.8 percent compared to the 0.7 percent forecast in October 2022. He said he expects that negative developments such as high prices and inflation are expected to be overcome in the long term. According to the IMF’s latest report, he noted, the EU’s GDP is expected to grow by 1.6 percent in 2024 and by 2.2 percent in 2025. Pointing out that economic power is shifting towards the northeast of the EU, the MCI CEO stated that EU steel demand has been showing signs of preceding this shift. 

Stating that the European steel market trends are negatively affected by the high volatility in major economic parameters despite the expectations of cost and inflation stabilization, Mr. Siryk said that the increasing interest rates, exchange rate uncertainties, and Emission Trading System (ETS) costs pose potential downside risks for steel demand. He added that the regulatory framework should be enhanced. 

Commenting on prices, Siryk said that iron ore prices are expected to reach $126/mt this year, before going down to $116/mt in 2024. He added that iron ore prices will decline to $104/mt during the 2026-28 period, though emphasizing that these figures are only assumptions, not official forecasts.