Germany, the largest steel producer in the EU, continues to lag behind other industrialized countries in terms of demand for metal products. This is indicated by the country’s Steel Industry Association (WVStahl), citing a recent short-term forecast by Worldsteel.

Although Worldsteel expects a slight increase in demand in the country of 1.5% to 27 million tons this year, this can be classified as a “technical recovery” due to restocking.

The projected 4.6% increase in demand for hot-rolled products to 28 million tons in 2026-1, WVStahl notes, should be viewed against the backdrop of extremely low figures in previous years and will not exceed the levels seen during the 2009 global financial crisis.

“Worldsteel data shows that the toxic combination of weak demand in Asia and global overcapacity will continue to cause problems in 2026 and put enormous pressure on the EU market from imports,” said Kerstin Maria Rippel, managing director of WVStahl.

She emphasized that this makes the signal sent by the EC regarding new protective measures even more important. The industry association expects the German government to advocate for the introduction of this instrument.

The decline in production in key steel processing sectors, particularly the automotive and mechanical engineering industries, is having a negative impact on the steel industry.

“Without short-term stimulus, we cannot expect a turnaround in domestic demand for steel,” Rippel explained.

In her opinion, a special fund for infrastructure and climate protection is a ray of hope that could come into effect in 2027.

«In order to achieve the desired economic stimulus in the future and at the same time strengthen industrial value creation in the country, legislative action must be taken now, and investments must be clearly focused on climate-friendly raw materials produced in Germany and the EU. The current review of public procurement legislation offers a great opportunity that must not be missed,» said the association’s managing director.

In addition, the German Steel Summit should demonstrate ways to achieve internationally competitive electricity prices and effective protection against carbon leakage. Only with a package of policy measures can Germany’s metallurgical industry and its industrial base be put back on track, Rippel concluded.

As a reminder, in January-August 2025, German steelmakers reduced steel production by 11.9% y/y – to 22.4 million tons. Pig iron production fell by 14.6% y/y – to 14.12 million tons in the first eight months of the year, while rolled steel production fell by 7.7% y/y – to 19.94 million tons.