German steel production falls again in February 2023 for 12th month of decline, WV Stahl says

Crude steel output in Germany continued to decline in February 2023 compared with a year earlier, national steel industry association WV Stahl said on Tuesday March 21. But other market sources suggested that substantial output cuts were partly intended to keep the market under control.
German domestic crude steel production totalled 2.994 million tonnes in February, down by 6.9% from 3.215 million tonnes in February 2022, the industry body said. This marked the twelfth consecutive month of decline in crude steel output in the country.

The decline was due to several steel production cuts announced by German mills during the fourth quarter of 2022, intended to balance an oversupplied market, especially in the flat steel sector.

Notably, steel output from Germany’s basic oxygen furnaces, mainly used in the production of flat steel, dropped by 4.9% year-on-year to 2.044 million tonnes in February, from 2.150 million tonnes in the corresponding month of 2022.

Even though flat steel prices across Europe have been recovering since the beginning of 2023, this recovery was mainly due to a rebound in apparent steel demand and tighter supply, rather than an improvement in real steel demand. Therefore, market sources suggested that European mills would keep output rates under control to “keep buyers hungry.”

Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe, averaged €768.42 ($823.62) per tonne in February 2023, sharply down from an average of €952.01 per tonne in February 2022.

The index, however, was up month-on-month, from an average of €720.36 per tonne ex-works in January 2023.

Meanwhile, Germany’s crude steel output from electric-arc furnaces (EAFs) amounted to 950,000 tonnes in February 2023, down by 10.8% from 1.065 million tonnes in February 2022, WV Stahl said. Steel produced via EAFs is mainly used in the production of long steel materials.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €715.00 per tonne in February 2023, down from an average of €840.63 per tonne a year earlier.

Demand for long steel products remained subdued in Germany due to a slow performance by construction, the key consuming industry, sources said.

European mills have made an attempt to increase prices recently to reflect higher costs, but buyers have been quite skeptical about the move so far, because demand was still low.

Published by: Julia Bolotova