Apparent steel consumption in recession in 2023

Apparent steel consumption is recording a recession in 2023 amid both political and economic challenges.

"The outlook for the European steel sector is becoming gloomier every quarter. Global tensions, the unresolved energy crisis, high inflation, tighter economic conditions, and historically high import quotas are strangling production. This situation is having a negative impact on steel demand. It is essential that EU decision-makers take urgent action to keep Europe in the global race for clean technology," said Axel Eggert, Director General of EUROFER.

In the second quarter of 2023, apparent steel consumption recorded its fifth consecutive decline (-7.6%), totaling 35.6 million tonnes.

This volume, although higher than the previous quarter, is still below the levels of 2021 and the first half of 2022. The negative trend is expected to continue for at least one more quarter. As a result, we will see a deeper decline in apparent steel consumption for the whole of 2023 (-5.2%, previous estimate -3%).

This marks the fourth annual recession in the last five years (-7.2% in 2022). In 2024, a stronger recovery is expected (+7.6% from +6.2%). However, this recovery is conditional on still very uncertain positive developments in industrial outlook and steel demand.

Apparent steel consumption influenced by the Israel–Hamas conflict

Europe's economy is bracing for the ripple effects of the escalating conflict between Israel and Hamas. This conflict could destroy the sense that things are starting to look more positive 20 months after Russia's invasion of Ukraine.

Disruptions are anticipated in the supply chains for oil, steel, and various metals. Indeed, if it continues, the conflict could negatively affect steel prices, as well as many other commodities.

Directly, the prolonged conflict could severely affect steel exports from Turkey to Israel and could disrupt the supply of scrap iron from Israel to Turkey.