The country produced 2.631 million tonnes of crude steel in December 2023, down by 2.3% compared with December 2022. Over the whole year of 2023, crude steel output in Germany dropped by 3.9% year-on-year to 35.438 million tonnes.
“This is the lowest production volume since the financial market crisis in 2009,” WV Stahl said. “At that time, however, things quickly picked up again after a sharp decline caused by the recession.”
According to the industry association, energy-intensive production from electric-arc furnaces (EAFs) in the country was particularly affected by the high electricity prices and the weak construction sector. German EAF-based mills produced 533,000 tonnes of crude steel in December, up by only 0.4% from December 2022.
In December 2022, the country’s crude steel output was severely affected by numerous cuts as a response to low demand, so in December 2023 a slight rebound was negligible due to the low base for comparison.
Over 2023, however, total production from EAFs dropped to 9.806 million tonnes, a decrease of 10.8% compared with the previous year. “The volume even fell below the low point [that was seen] during the financial market crisis,” WV Stahl said. “At that time, electrical steel production was 11.3 million tonnes.”
WV Stahl added that there had been steady declines in production since March 2022. According to the association, such a long negative cycle has never been seen before in Germany’s steel industry.
Steel produced via EAFs is mainly used in the manufacture of long products. According to Fastmarkets’ sources, demand for long steel in Germany remained subdued due to a slow construction sector.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €642.50 ($699.84) per tonne in December, down from an average of €753.75 per tonne a year earlier.
Meanwhile, steel output from Germany’s basic oxygen furnaces (BOFs), which is mainly used in the production of flat steel, decreased by 2.9% year-on-year to 2.099 million tonnes in December.
Flat steel prices increased across Europe in December due to attempts by mills to cover their higher production costs. But demand remained low. Fastmarkets’ sources explained that a price rise this month was driven by the limited availability of material in the market.
Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe, averaged €688.20 per tonne in December, outstripping the average of €642.73 per tonne a year earlier.
But market sources remained sceptical that steel production rates in Germany would rebound in 2024.
Kerstin Maria Rippel, general manager of WV Stahl, called for political action to mitigate the effects of the rising production costs in the steel industry.
“This is particularly acute when it comes to the still-uncompetitive electricity costs,” Rippel said. “Transmission network fees have doubled since the beginning of the year, [and] are higher than ever before.”
She added that a clear political idea was needed concerning how to sustainably fund the transformation of the industry toward climate-change neutrality.