Eurofer revises EU steel demand forecast for 2022 to 2% drop from previous 3% growth

Steel consumption in Europe could contract by almost 2% this year as a result of soaring energy prices, ongoing disruptions to supply chains and the shock of the war in Ukraine, European steel association Eurofer said May 5.

In its forecast early February, Eurofer had expected EU steel consumption to grow by 3.2% year on year in 2022 and by 1.7% in 2023. But now a market contraction — which would be the third in the space of four years — looks to be likely, Eurofer said.

“The evolution of the steel market for 2022 and 2023 remains subject to a high level of uncertainty, which is likely to continue to undermine demand from steel-using sectors”, Eurofer Director General Axel Eggert said in a statement.

High uncertainty is set to last at least until the end of 2022, depending on developments around Russia’s invasion of Ukraine and its consequences for global supply.

“In the current context, amidst a worsening energy crisis and shortages in raw materials, we cannot exclude a new recession or a stagflation scenario,” Eggert said.

In line with the updated forecast, steel consumption in Europe is set for a 1.9% decrease this year, followed by a 5% recovery in 2023. It strongly rebounded in 2021 (+15%), after the 10.7% slump in 2020.

The growth in EU steel end-user sectors’ output over 2022 is now expected to halve to 2%, down from 4% forecasted in early February. In 2023, it could inch up comparably, by 2.3%, according to Eurofer.

Last year marked a 7.3% post-pandemic rebound in total output in steel-using sectors despite soaring energy prices in the second half of the year, component shortages and lower run rates especially in the automotive sector.

On May 4, Platts assessed Northwest European hot-rolled coil price at Eur1,260/mt, or $1,330.43/mt, ex-works Ruhr, down Eur5 on the day.

— Ekaterina Bouckley