Norway’s steel demand expected to strengthen in H2 2024 as economic fundamentals improve

Norway’s steel demand is expected to strengthen in the second half of 2024 and 2025 helped by a recovery in economic fundamentals mainly in the construction sector, Arne Reinertsen, CEO of E.A. Smith, the only steel service center in the country, told S&P Global Commodity Insights on the sidelines of the EUROMETAL conference in Oslo on June 4.

The construction sector was the largest consumer of steel in Norway in the first half of 2024, followed by the oil and gas sector.

“Construction went down 30% to 40% [in H1 2024] from its peak as both residential and commercial real estate were affected by high interest rates, with housing starts hitting 20-year lows, despite population growth,” Reinertsen said. “The offshore sector has been solid throughout, driven by high energy prices and COVID-era tax incentives for capital expenditure.”

Norway’s total steel consumption including all grades and qualities, and shapes and sizes, was around 1.3 million-1.4 million mt in the 12 months ended April that is “pretty flat relative to the preceding 12 months,” Reinertsen said. “Around 90% of this is imported, while the rest is made by rebar producer Celsa [Armeringsstal] in Mo i Rana,” he said, citing Norway statistics data.

“While imports of long steel for construction are down around 40% year on year and traditional flat steel imports down approximately 20% on the year, pipe and steel for the offshore industry have held up total volumes reasonably well,” he said.

Nils Kristian Knudsen, analyst at consumer banking company Handelsbanken expects H2 2024 to be brighter for the Norwegian economy, with houses prices rising 6%-7% each year going forward, sustaining the construction sector and the steel industry.

Norway produced 689.884 mt of steel products in 2023, down 2% year on year, according to wordsteel data. Celsa Armeringsstal is Norway’s only steelmaker. It is part of Celsa Nordic, which serves the broader region, and makes liquid steel via electric arc furnace and finished rebar products.

Halvard Meisfjord – Celsa Nordic

Celsa Nordic’s low carbon strategy

Celsa Armeringsstal expects its total steel products output for 2024 to be slightly below 2023, Halvard , Celsa Nordic commercial manager and chairman of Norwegian Steel Association told Commodity Insights on the sidelines of the event.

Celsa Armeringsstal uses 55% of all steel scrap in Norway as raw material, and hydropower in its melting processes, making it a low CO2 emitter in the country with 304 kg CO2e/mt each year. Celsa Nordic aims to cut its CO2 emissions by 50% by 2030 and reach zero CO2 emissions by 2050, said.

Celsa Nordic is part of Celsa Group. Celsa Group has said that it expects to sell some of its plants in Poland, Norway and the UK to strengthen its financial position.

Platts, part of Commodity Insights, assessed the price of Northwest European rebar at Eur600/mt ex-works on May 29, up Eur15 on the week.

Author Annalisa Villa,