German crude steel production expected to drop to 14-year low: industry body

Author Laura Varriale

German crude steel production is expected to drop 4% year on year in 2023 to 35.5 million mt, the lowest production level recorded since 2009, German steel federation WV Stahl said Dec. 19. Crude steel production stood at 32.7 million mt in 2009.

The energy-intensive electric arc furnace-based production has been affected the most, expected to drop to 10.1 million mt in 2023, a drop of 11% on the year. The production route has seen consecutive drops for 21 months.

The construction industry has been subdued with Germany’s rising inflation holding investments back. Long steel used in the construction industry is produced via EAF-based production.

According to latest available detailed data from October, steel production via EAF Electric Arc Furnace route fell by 20.9% in October to 799,000 mt year on year, and by 12.9% year to date to 8.4 million mt compared with the same period in 2022. Crude steel production via Blast Furnace route decreased by 3.1% last month to 2.08 million mt year on year and by 0.2% to 21.70 million mt from January to October compared with the same period a year before.

Platts daily price for domestic produced hot-rolled coil, predominantly produced via blast furnace, was assessed at Eur685/mt EXW Ruhr Dec. 18, down Eur5/mt on the day following some positive price movement in the fourth quarter. The weekly Platts rebar assessment was last assessed at Eur620/mt EXW Northwest Europe, stable on the week. Rebar, which is produced via EAF-production, has seen subdued prices over the course of this year between Eur590-620/mt EXW, levels last seen in 2020.

“Steel production is currently in free fall,” said Kerstin Maria Rippel, managing director of WV Stahl, adding that the German government should be working on providing “affordable” energy prices.

Earlier in October, the World Steel Association cut its forecast for steel demand growth in 2023 by 0.5 percentage point to 1.8%, saying the global economic outlook has worsened, but it raised its forecast for 2024 by 0.2 point to 1.9%.