The European steel market remains under significant pressure despite modest improvements in demand, according to EUROFER's Economic and Steel Market Outlook 2026-2027.
Apparent steel consumption increased by 4.4% in 2025. However, the rebound was largely driven by exceptional factors and does not signal a sustained recovery. Demand remains around 10Mt below pre-pandemic levels, while growth is expected to slow sharply to just 0.4% in 2026.
Axel Eggert, director general of the European Steel Association (EUROFER), commented: "Modest improvements in demand should not be mistaken for a genuine recovery. Manufacturing remains weak, energy costs remain elevated, and uncertainty linked to global trade and geopolitical tensions continue to weigh on investment and industrial activity."
Despite stronger-than-expected growth in apparent steel consumption in 2025, the recovery remains weak with growth is expected to remain almost flat this year before improving only gradually in 2027.
"Modest improvements in demand should not be mistaken for a genuine recovery. Manufacturing remains weak, energy costs remain elevated, and uncertainty linked to global trade and geopolitical tensions continue to weigh on investment and industrial activity."
Axel Eggert, director general of the European Steel Association (EUROFER).
Demand from steel-using sectors declined again in 2025 (-0.1%), marking a second consecutive year of contraction. While a modest improvement is forecast for 2026 (+1.3%), a more meaningful recovery is not expected before 2027.
The automotive sector - one of Europe's most important steel-using industries - remains a major source of concern. Output fell sharply in 2024 and continued to decline in 2025, reflecting weak consumer demand, slower-than-expected electric vehicle uptake and persistent uncertainty affecting manufacturers. The sector is expected to remain under pressure throughout 2026.
Construction is Europe's largest steel-consuming sector and it continues to provide some support to demand. That said, growth remains modest and faces increasing headwinds from higher financing costs and a weakening economic environment.
The broader economic environment remains challenging. Rising energy prices linked to tensions in the Middle East have reignited inflationary pressures and prompted further monetary tightening, while industrial output in several major EU economies remains below pre-pandemic levels.
Although imports eased somewhat in early 2026 following exceptionally high levels at the end of last year, global steel overcapacity and intense international competition continue to weigh heavily on European producers.
Without stronger industrial growth, improved competitiveness and lower energy costs, EUROFER expects Europe's steel market to remain under pressure for the foreseeable future.
Despite the doom and gloom, however, it's worth remembering that
the European steel industry is a world leader in innovation and environmental sustainability, according to EUROFER, and that it has a turnover of around €192 billion.
The European steel industry directly employs 293,000 highly-skilled people and produces, on average, 146Mt/yr of steel.
According to EUROFER, more than 500 steel production sites across 22 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe and is the most versatile industrial material in the world, it is claimed.