European steel demand is expected to rise 0.4% in 2026 and 2.2% in 2027, following a stronger-than-expected 4.4% rebound in 2025, as continued weakness in the automotive sector offsets gains in construction, according to Eurofer’s latest market outlook, published on June 25.
Apparent steel consumption in the EU reached 134 million metric tons in 2025, driven by exceptional factors, including a sharp rise in imports in the second half of the year. However, consumption remains about 10 million mt below pre-pandemic levels, while crude steel production fell to a record low of 125.8 million mt last year, down 2.9% year over year.
The modest 2026 growth forecast reflects ongoing economic uncertainty, geopolitical tensions, and weak industrial demand, Eurofer said. Real steel consumption is expected to increase by 1.4% in both 2026 and 2027.
“Modest improvements in demand should not be mistaken for a genuine recovery,” Axel Eggert, Director General of the European Steel Association (EUROFER), said.
“Manufacturing remains weak, energy costs remain elevated, and uncertainty linked to global trade and geopolitical tensions continues to weigh on investment and industrial activity.”
Industrial demand remains under pressure
Demand from steel-using sectors declined again in 2025 by 0.1%, marking a second consecutive year of contraction. Although a modest improvement is forecast for 2026, up by 1.3%, a more meaningful recovery is not expected before 2027.
Construction, the EU’s largest steel-consuming sector, is expected to continue growing in 2026, rising 1.5% despite an interest rate hike linked to accelerating inflation. The sector grew 1.3% in 2025. The automotive sector remains the weakest major steel user, with output declining for six consecutive quarters. Production contracted 9.7% in 2024 and a further 4.3% in 2025, partly due to uncertainty surrounding US tariffs and weak manufacturing conditions. A further 0.2% decline is expected in 2026, with recovery not anticipated until 2027, when output is forecast to grow 2.9%. As a highly export-oriented industry, the EU automotive supply chain remains especially exposed to energy and trade shocks, Eurofer said.
Record import surge
Steel imports accounted for 37% of apparent steel consumption in the fourth quarter of 2025, the highest level on record. Throughout 2025, imports represented 30% of apparent consumption.
Total imports surged 53% in the fourth quarter of 2025 but dropped 23% in the first quarter of 2026. The main sources of finished steel imports were Turkey, with a 17.2% share, followed by South Korea at 11.5%, China at 9.9%, India at 8.9%, Ukraine at 7.3% and Indonesia at 5.4%.
EU steel exports to third countries fell sharply by 33% in the first two months of 2026. The main destinations were the UK, Turkey, Switzerland, the US, and India, which together accounted for 61% of total EU finished product exports.
The EU trade deficit narrowed to about 1.5 million mt/month in early 2026, compared with 2 million tonnes per month in 2025.
Capacity utilization remained subdued at 65.4% in the first quarter of 2026, Eurofer said.
Platts, part of S&P Global Energy, assessed domestic HRC in Northern Europe at Eur680/mt ex-works Ruhr, and in Southern Europe at Eur670/mt EXW Italy on June 24 , both stable day over day. Platts assessed imported HRC in Northern Europe at Eur585/mt CIF Antwerp, and in Southern Europe at Eur585/mt CIF Southern Europe, both unchanged day over day.
Author: Annalisa Villa
