According to the first quarter report of the 2026-2027 economic and steel market outlook published by the European Steel Association (EUROFER), steel demand in the European Union has begun to show signs of stabilization following three years of contraction. However, the report stated that the recovery will be limited and consumption levels will remain well below pre-pandemic levels in the coming years.
According to the report, the industrial outlook for 2025 has improved slightly compared to previous expectations, and steel demand showed signs of stabilization, particularly in the second half of the year. However, it was stated that this improvement largely stems from comparisons with the very low volumes recorded in the second half of 2024. In this framework, steel consumption is expected to increase by 2.4% in 2025, instead of the -0.2% decline projected in the previous outlook. It was noted that this increase will occur thanks to stronger-than-expected demand in some national markets and will partially offset the impact of trade disruptions, including US customs duties.
On the supply side, EU crude steel production continued its decline. According to the report, production in 2025 fell to 125.8 million tonnes from the 130 million tonnes level in 2024, decreasing by approximately 3% on an annual basis. EUROFER emphasized that this situation points to the ongoing contraction in the European steel sector and permanently low capacity utilization due to weak demand and increasing import pressure.
According to data on the EU steel market, apparent steel consumption recovered in the third quarter of 2025 following declines in the previous two quarters. During this period, consumption reached 32 million tonnes, increasing by 4.6% annually. Domestic deliveries followed a similar trend, showing a 3.4% increase in the third quarter after a -1.6% decline in the previous quarter. In contrast, domestic deliveries had experienced declines in previous years due to weak demand, falling by -4.6% in 2023 and -2.8% in 2024.
A remarkable increase was observed on the import side. Steel imports into the EU, including semi-finished products, increased by 10% quarter-on-quarter in the third quarter of 2025. Consequently, the share of imports in the EU’s apparent steel consumption rose from 25% in the previous quarter to a record level of 29%. In the entirety of 2024, the share of imports had been 27%.
Developments in steel-using sectors were also included in the report. The Steel Weighted Industrial Production (SWIP) index recorded an increase of 1.8% in the third quarter of 2025 after six quarters of decline. Nevertheless, the index continued to reflect the impact of weakness in the automotive sector, as well as mechanical engineering, household appliances, and metalware sectors, which are more exposed to global trade and external shocks.
The report stated that the construction sector has given limited recovery signals since the second quarter of 2025. In the third quarter, a partial recovery was seen in manufacturing activities and steel-using sector production, thanks to modest improvements in industrial indicators and the delayed effects of low interest rates.
According to EUROFER, the SWIP index decreased by -3.5% in 2024, despite showing resilience in the previous two years. The decline in construction and automotive production was decisive in this fall. While a more limited contraction (-0.3%) is expected in 2025 due to increasing uncertainties, declines of -4.3% and -0.8% are projected for automotive and mechanical engineering production, respectively.
In the medium term, a limited recovery is expected. SWIP growth is projected to rise to 1.9% in 2026 and reach 2.2% in 2027. The report stated that this increase will be supported particularly by growth in the construction sector and the recovery in automotive production.
