EUROFER: steel demand in the EU will remain almost unchanged in 2026, and a more noticeable recovery is expected in 2027.

According to the report of the Economic Committee of the European Steel Manufacturers Association (EUROFER) "Prospects for the development of the economy and the steel market for 2026-2027/Q3 2026", steel consumption in the EU increased by 1.5% year-on-year in the first quarter of 2026 to 34.4 million tons

The forecast for steel consumption for the current year has been revised downward by 2026

EUROFER expects the economic recovery to slow down. Reflecting market expectations of stabilization and continued weak production demand due to disruptions in the Strait of Hormuz and other geopolitical issues, the association currently predicts that steel consumption in 2026 will grow by only 0.1 percent to 135 million tons, compared with a previous forecast of 0.4 percent. The growth rate is expected to increase to 2.3 percent in 2027, bringing consumption to 138 million tons. Despite this, volumes are still projected to be 7 million tons below pre-pandemic levels. 2019.

Meanwhile, real steel consumption increased by 1.6% year-on-year in the first quarter of 2026, following an 11.5% increase in the fourth quarter of 2025.

Production and capacity utilization remain weak

EU steel production in 2025 fell to a record low of 125.8 million tonnes, down 2.9% year-on-year and up 1.1% in May 2026. According to EUROFER, this decline was caused by weak demand from the steel sectors and persistently high energy and production costs compared to other major steel producing regions. Capacity utilization increased to 67 percent in May 2026 from 65 percent in 2025, but remains historically low.

There is a gradual recovery in the steel sectors

Demand in the steel sectors, as measured by the Weighted Industrial Steel Index, is projected to increase by 1.5 percent in 2026 after declining by 4.1 percent in 2024 and 0.1 percent in 2025. In 2026, construction, the EU's largest steel-consuming sector, is expected to grow by 1.8 percent and mechanical engineering by 1.9 percent, while automotive production is projected to decline by another 0.9 percent. SWIP growth is expected to accelerate to 2.5% in 2027 due to construction (2.9 percent growth), mechanical engineering (1.8 percent growth), and automotive manufacturing recovery (3.5 percent growth).

The EU economy is showing resilience despite the geopolitical tensions

EUROFER noted that the EU economy has proved resilient despite the tensions in the Middle East, although this has not yet led to a significant industrial recovery. EU GDP grew by 1.2 percent year-on-year in the second quarter of 2026, compared with 0.8 percent in the previous first quarter. Over the same period, real GDP grew by 0.9 percent in Germany, 0.7 percent in France, 1 percent in Italy and 2.7 percent in Spain. EUROFER forecasts EU GDP growth of 1.1 percent in 2026 and 1.4 percent in 2027, while the IMF expects eurozone GDP to grow by 0.9 percent and 1.2 percent, respectively.