According to Eurofer’s latest report, demand is expected to shrink by 1.8% to 127 million tonnes in 2024. This is a downward revision from the previous forecast from end-July of a slight recovery by 1.4%.
At the beginning of the year, Eurofer predicted a recovery of apparent steel consumption in the EU by 5.6%, rising to 137 million tonnes in 2024. Since then, this has been the third time Eurofer has downgraded its forecasts.
“In 2024, due to poor developments in the industrial outlook and decreasing demand from steel-using sectors, particularly construction and automotive, apparent steel consumption is projected to experience another recession, albeit moderate,” Eurofer said, adding that a modest recovery is foreseen in 2025.
According to the association, apparent steel consumption in the EU in 2025 will increase by 3.8% to 132 million tonnes, still below the pre-pandemic volume of 145 million tonnes in 2019.
After a short-lived rebound of apparent steel demand in January-February 2024 related to restocking, activity in the European flat steel market has been deteriorating, with prices under pressure.
For example, in February, Fastmarkets’ steel hot-rolled coil index domestic, exw Northern Europe averaged €738.28 ($797.86) per tonne ex-works.
Since then, the average monthly HRC price has been decreasing gradually, and for September, it reached €567.22 per tonne. Similar levels were last recorded in November 2020, when the index averaged €530.72.
At the beginning of October, European mills tried to push prices up by increasing their offers.
But demand remained weak, and deals continued to be concluded at lower levels.
“Mills’ attempts for price increases were unsuccessful, but at least the HRC prices stopped dropping further,” a buyer source told Fastmarkets.
Industry sources commented that any hopes for a price rebound would be postponed to the first half of 2025. A potential positive impact on the domestic HRC price could be uncompetitive import offers combined with some output cuts in the local market, Fastmarkets understands.
End-user outlook
Automotive
Eurofer said that automotive output in the EU27 had previously increased by 8.3% overall in 2023, despite the overall subdued investment outlook.
“However, output levels have remained low in historical terms, far below the levels seen in 2018 and 2019,” Eurofer added.
The sector was expected to decline by 6.5% in 2024 (revised downward from a 3% decline in a previous outlook) and to increase by just 1.9% in 2025 (revised downward from a 2.3% growth).
According to Eurofer, the reasons for the negative trend were related to the protracted weakness of the manufacturing sector, overall EV standards uncertainty and lackluster consumer confidence.
“Demand is projected to remain weak until the macroeconomic picture and consumer disposable income substantially improve, given the rather unpredictable economic outlook and uncertain economic growth perspectives”, Eurofer said.
But according to the association, demand has shown some resilience against all the uncertainties around the implementation of EVs and preparing the ground for the ban of petrol cars by 2035.
Negotiations between steel mills and original equipment manufacturers (OEMs) in the automotive industry for HRC contracts for the first half of 2025 were still underway, and OEMs would likely seek substantially lower prices for the next year contracts, sources reported.
Notably, several sources told Fastmarkets that for the first half of 2025 contracts, OEMs were asking for discounts up to €200 per tonne, which were “unacceptable” from suppliers’ point of view.
For the second half of 2024, long-term contracts with automotive OEMs were closed at €730-750 per tonne — and even at €700 per tonne in some cases — in contrast with €800 per tonne in the first half of the year.
Construction
The largest steel-using sector — representing 35% of total steel consumption — construction consumption fell by 0.8% in 2023.
For 2024, Eurofer expected that construction activity would continue to decrease, falling by 1.3% rather than the previous prediction of a 1.4% decline.
The sector is expected to grow by 1.3% in 2025 (revised downward from 1.8%).
According to Eurofer, construction output has been under pressure since the third quarter of 2022.
“This is due to several factors, including rising construction material prices, labor shortages in some EU countries and increasing economic uncertainty. Most notably, higher interest rates in 2022 and 2023, driven by monetary policy tightening, have also played a key role,” Eurofer said.
All these factors impacted the sector negatively, especially the private non-residential sub-sector.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe averaged €635.63 per tonne at the midpoint in September, up slightly by €8.13 per tonne from a monthly average of €627.50 per tonne at the midpoint in August. But the assessment was sharply down from a monthly average of €589.38 per tonne at the midpoint in September 2023.