Production at Germany’s steel-using industries dropped in the second quarter – the first period marked by the war in Ukraine, and more recent order intake figures suggest low activity going forward.
In the second quarter, companies produced 2.1% less than in the first quarter, and 2.7% less year-on-year, according to industry federation WSM. The first half-year in total saw orders decline by 1.5%. At the MBI Stahltag conference last week, WSM managing director Christian Vietmeyer presented the latest figures for July, which showed further drops for most sectors of the industry.
Wire products as well as surface coated and heat-treated products were down by more than 8% y-o-y, very likely because of their higher consumption of costly natural gas. Many other segments saw drops of between 2% and 6%. A positive exemption occurred on cold-rolled narrow strip, which was up 3%, and for pipes, which were up by 1.5%, probably owing to orders for domestic infrastructure, Kallanish heard from Vietmeyer.
The negative gap becomes much wider when looking at the order intake of the month as well as seven-month period, which was down in the two-digit percentage range for most products. However, the figures compete with the base effect of a strong summer in 2021, when many companies caught up on the lull of 2020. A recent outlier is the arms industry, which in the first seven months saw orders rise by as much as 207%. Notably, July itself brought a y-o-y drop for that sector, too, by 15%, in spite of the ongoing war in Eastern Europe.
Christian Koehl Germany