Eurofer cuts steel demand outlook again, rebound uncertain

Eurofer has again cut its outlook for 2023 apparent steel demand due to persistent tensions created by economic weakness and geopolitical developments. The association expects the rebound to materialise from the fourth quarter and into 2024, but uncertainties remain high.

Apparent steel demand in full-year 2023 is now set to decline 5.3% year-on-year. After the two-digit decline of 11.3% y-o-y in Q1, the negative trend slowed down somewhat. Eurofer expects apparent demand to rebound 3.6% on-year in Q4, but challenges continue to raise questions.

In 2024, the rebound could be as strong as 7.6% for apparent steel demand, potentially taking consumption to above 2022 levels – 140 million tonnes. It is worth noting, nevertheless, that the latest peak apparent consumption levels registered in 2018 and 2021 – approximately 150m t/year – remain far off.

“The perspectives for the European steel sector get gloomier every quarter amidst disruptive wars, global tensions, an unresolved energy crisis, high inflation, tightening economic conditions and historically high import shares that are strangling manufacturing. This situation negatively impacts steel demand,” Axel Eggert, director general of Eurofer, says in a note seen by Kallanish.

Despite weakening apparent demand, real demand is still expected to remain stable, seeing 0.3% y-o-y growth this year, followed by 0.2% in 2024.

The declining demand trend has also impacted imports, which fell significantly in Q1 and Q2 this year. Nevertheless, imports continued to maintain their share of market supply at above historical levels, at 28% of total European supply, according to Eurofer.

Emanuele Norsa Italy