The metallurgical industry of the European Union is going through challenging times. Although 2024 showed a slight recovery, the capacities of major producers remain underutilized, and global competitiveness continues to weaken. This is causing concern among both manufacturers and European officials.
Recovery after the downturn: Is there progress?
From 2018 to 2024, the EU metallurgical sector has undergone significant changes. Over the past year, European manufacturers produced 129.5 million tons of steel, which is 2.5% more than in 2023. However, this figure still significantly lags behind the average of 149.48 million tons produced annually in 2018-2022. This means that even with slight growth, the sector continues to operate with lower volumes than in previous years.
Main issues: Why is the EU metallurgy lagging behind?
Despite stabilizing energy prices and increasing demand, the capacity utilization in manufacturing facilities in countries such as Germany, Italy, Spain, and France does not exceed 75%. This indicates serious structural challenges that require decisive actions from governments and regulators.
One of the biggest challenges for European metallurgists is the introduction of the Carbon Border Adjustment Mechanism (CBAM). According to the European Steel Association EUROFER, this mechanism could undermine the industry’s competitiveness if not properly calibrated.
Additional pressure comes from stringent environmental regulations. The European People’s Party recently proposed easing climate policies to reduce the administrative burden on businesses. This could help manufacturers maintain competitiveness on a global scale.
Steel imports and scrap exports: Additional challenges
One of the problems is the excessive steel import from outside the EU. EUROFER calls for a 50% reduction in quotas for flat steel imports to protect the internal market. However, the question remains open: will European policymakers agree to this?
Furthermore, a large amount of scrap metal is being exported outside the EU. At the same time, this material could be used for recycling within the European Union, promoting a circular economy and reducing emissions. Taking this into account, EUROFER and European Aluminium insist on imposing restrictions on scrap exports to third countries.
The future of European metallurgy: What lies ahead for the industry?
Experts point to the need for deep reforms and the implementation of innovative technologies aimed at decarbonizing production. However, without significant changes in economic policies and stimulating the manufacturing sector, the EU may lose its positions in the global market.
“Brussels faces a choice: to support the real economy sector or to watch further contraction of production capacities. Without serious changes, 152 million tons of steel produced in 2021 will remain in the past,” says Stanislav Zinchenko, director of GMK Center.
Conclusion: The EU must act immediately
European metallurgy is in a critical condition, and swift and effective solutions are needed to preserve it. Regulating CBAM, steel imports, and environmental restrictions are just part of the problems that need to be addressed. Is the EU willing to change its policies to save this strategically important industry? The answer to this question will determine the future of Europe’s metallurgy.
