At its New Year’s ceremony on Wednesday 21 January in Differdange, ArcelorMittal Luxembourg drew a harsh assessment of the steel situation in Europe. Faced with global overcapacity, pressure from imports and energy costs, the group is calling for rapid European measures to preserve a competitive, low-carbon steel industry. And it is delighted with its new dust capture installation.
Meeting in Differdange for the 2026 New Year’s ceremony, the directors of ArcelorMittal Luxembourg delivered a detailed analysis of the situation in the steel market and the challenges facing the European steel industry. Valérie Massin, country manager, and Pierre Jacobs, CEO of long products Luxembourg, described a strategic sector weakened by global imbalances, while reaffirming the group’s industrial commitment to the Grand Duchy.
Pierre Jacobs recalled the central role of steel in the modern economy, present in infrastructure, construction, automobiles and now electric vehicles, as well as in the circular economy thanks to its recyclability. However, this indispensability contrasts with the evolution of the global market. In 2024, global steel production reached around 1.8 billion tonnes, almost three-quarters of which was produced in Asia, mainly in China, but also in India, South Korea and Japan. The European Union’s (EU) share now stands at only around 130 million tonnes, or less than 10% of global production, and is down by around 25% on levels before the health crisis.
This contraction is accompanied by a reversal in trade flows. Whereas the EU was still a small net exporter of steel in 2015 and 2016, since 2017 it has become a net importer, with imports sustainably exceeding exports. This development is having a direct impact on European industrial capacity utilisation. After a sharp fall during the 2009 financial crisis and then in 2020 with the health crisis, the production capacity utilisation rate today remains at low levels, often below 70%, reflecting both the scale of imports and an economic climate deemed gloomy in Europe.
Target of zero fatal accidents
There are also social issues at stake. The European steel industry represents around 300,000 direct jobs, over a million indirect jobs and several hundred thousand induced jobs. In terms of added value, the steel ecosystem contributes several hundred billion euros to the EU economy.
At the level of the ArcelorMittal group, Pierre Jacobs recalled the strategic priorities, starting with the health and safety of employees. Since the group was created in 2006, the lost-time accident frequency rate has fallen from around 3 in 2007 to 0.68 in 2025, at a time when the company has set itself the target of zero fatal accidents from 2027. The CEO acknowledged the highly ambitious nature of this objective, pointing out that fatal accidents have still been recorded in recent years, including in Luxembourg.
Installation reliability is another key focus, both for cost control and for meeting the delivery times promised to customers. Any unforeseen breakdown is likely to disrupt the production chain and the service provided. Added to this is the Group’s strategic growth, both organically and through acquisitions, illustrated in particular by expansion projects in India, Brazil and the United States.
The climate issue also plays a central role. As a heavy industry by nature, the steel industry is highly exposed to the challenges of decarbonisation. Pierre Jacobs pointed out that Luxembourg was ahead of the game in the 1990s when it replaced blast furnaces with electric furnaces, which emit at least four times less CO2. This transformation is a model that the group intends to extend to other European and global sites.
If the EU waits until June, the 50% surcharge will come too late
Economic indicators confirm the current tensions. The PMI index, a barometer of industrial activity, has been fluctuating below the 50 threshold since 2023, signalling a lack of real growth, including in Luxembourg. In terms of prices, the hot-rolled coil benchmark shows that European prices are still lower than those in the United States, while Chinese export prices are much lower. China, which accounts for around 50% of the world’s steel production, thus has a major competitive advantage, fuelling pressure on the European market.
Valérie Massin extended the analysis by highlighting the structural deterioration of the market. Global overcapacity is estimated at almost 600 million tonnes, while European demand is contracting and cost differentials between European and non-European producers persist, notably due to energy prices. Faced with this situation, the European Commission presented an action plan on steel and metals in 2025, aimed at strengthening trade defence instruments, limiting imports and implementing the carbon adjustment mechanism at borders.
As far as imports are concerned, a ceiling of around 18 million tonnes of steel that can enter the European market freely is envisaged, above which a surcharge of up to 50% would apply. For ArcelorMittal, the challenge now is to implement these measures quickly. Delayed deployment, particularly after the first half of the year, could significantly reduce their effectiveness for 2026. All the more so as imports have been increased in anticipation by “stockists” who will not only have acquired stocks at lower cost, but who will no longer want Luxembourg products as a result.
A strategy to circumvent the balancing mechanism
The border carbon balancing mechanism, which comes into force on 1 January 2026, is a long-awaited step forward for European producers. However, Valérie Massin pointed to persistent loopholes, in particular practices that allow certain producers to direct lower-emission production towards Europe, while selling higher-carbon volumes elsewhere. In her view, these situations undermine the objective of a level playing field between producers subject to the EU ETS (Emissions trading system) and their international competitors.
Energy costs remain another determining factor. Since the war in Ukraine, gas and electricity prices in Europe have remained well above those in the United States or China, even though energy is a major input in steel production. While the European plan sets out guidelines, the group is still waiting for concrete measures for the wholesale market and for industries that consume a lot of energy.
In Luxembourg, ArcelorMittal employs around 3,510 people across several industrial and administrative sites. The country is ahead of the game in terms of decarbonisation, with 98% of its production based on electric furnaces using mainly recycled scrap metal. The group also highlights emblematic achievements, such as the supply of exceptional parts for the Henry Ford Hospital site in Detroit or the development of XCarb steel, showing around 300 kilos of CO2 per tonne produced thanks to the use of green electricity.
At the same time, ArcelorMittal is continuing to invest in Luxembourg, notably with the construction of its future world headquarters on the Kirchberg plateau, scheduled for completion in the first half of 2027. The building, 14,000 tonnes of steel, will embody the group’s expertise in low-carbon steel and sustainable construction.
