OPINION | Alessandro Sciamarelli, Director, Market analysis & economic studies

The European steel market showed the first signs of recovery in 2025 after several difficult years. 

Apparent steel consumption grew by 4.4% following three consecutive annual declines reaching 134 million tonnes although it remained around 10 million tonnes below 2019 levels. While this suggested that market conditions may finally be stabilising, beneath these encouraging figures lies a more troubling reality. 

While the EU consumed more steel in 2025, it produced less of it. 

First, this was mostly a rebound from the very low consumption volumes seen in the two previous years than a demand-driven recovery. Secondly, 

“EU crude steel production fell by a further 2.9% to 125.8 million tonnes, the lowest level ever 
recorded.”

Production was almost 20 million tonnes below pre-pandemic levels and nearly 60 million tonnes lower than before the 2008 financial crisis. This contrast between improving consumption and declining produc-tion reveals one of the defining challenges facing the European steel  industry today. The benefits of the market recovery increasingly flowed to imports rather than  domestic producers.

Imports of semi-finished and finished steel products rose by 14% in 2025, reaching almost 40 million tonnes. As a result, import-ed steel captured a record 30% share of the European market, up from 27% the previous year. Import growth accelerated sharply during the second half of the year, culminating in an unprecedented 53% surge in the fourth quarter.

Consequently, the EU consumed more steel than it produced, while the EU's trade deficit in steel products widened further, reaching 24 million tonnes for all products and 15 million tonnes  for finished products.

The figures highlight the growing pressure on European steelmak-ers. According to the OECD, global steel overcapacity continues to exceed 700 million tonnes, while European producers face persis-tently high energy costs, weak industrial demand and intense international competition.
Demand conditions nevertheless showed some encouraging signs. 

After two years of decline, demand from steel-using sectors broadly stabilised. Construction, Europe’s largest steel-consuming sector representing 37% of the total, continued to expand modestly (+1.3%) and is expected to remain a source of support in the coming years (+1.5% in 2026, followed by 2.9% in 2027), despite uncertainty stemming from the likely rise in interest rates in case of inflationled monetary tightening.

Other sectors remain under pressure. Automotive production continued to weigh on steel demand in 2025 with a third consecutive annual contraction (-4.3%) and is only expected to return to more meaningful growth from 2027 onwards (+2.9%) albeit around output volumes well below pre-pandemic levels.

Looking ahead, the outlook remains fragile. As part of the expected recovery was effectively anticipated in 2025, apparent steel consumption is forecast to remain broadly flat in 2026, growing by just 0.4%. Consumption growth is expected to strengthen in 2027 (+2.2%), although this remains highly dependent on developments in the wider economic and geopolitical environment, which remains broadly unpredictable.

The experience of 2025 highlights a critical issue for Europe’s industrial future. Recovering demand alone is not sufficient if increasing volumes of that demand are met by imports rather than European production.

The experience of 2025 sends a clear signal: demand is beginning to recover, but production is not. 

“The challenge for the coming years will be to ensure that future growth in steel consumption supports European production rather than increasing import dependence.” 

Whether the EU succeeds in doing so will be a key indicator of the health and competitiveness of its industrial economy.