According to EUROFER's "Economic and Steel Market Outlook 2024-2025" report, released October 29th, weakening demand in the construction and automotive sectors is signaling stagnation in apparent steel consumption.
EUROFER highlighted the continued uncertainty surrounding the overall trajectory of steel demand in its downward revision. The association also lowered its ASC growth forecast for 2025 from 4.1% to 3.8%. These changes reflect the ongoing challenges faced by Europe's steel sector since the second quarter of 2022.
Global geopolitical tensions, rising energy costs, and increasing production expenses continue to put pressure on steel demand and strain production processes. By the second quarter of 2024, the EU's ASC fell to 34.8 million tons, representing a 1.3% decrease following a 3% drop in the previous quarter.
Prevailing economic uncertainty is anticipated to continue negatively impacting growth within the steel market. The confluence of a second consecutive contraction in the construction sector and unprecedented challenges (since 2020) within the automotive sector may result in a more pronounced decline in growth across steel-consuming industries, potentially reaching -2.7%. Furthermore, persistent geopolitical tensions and the consequences of evolving monetary policies are intensifying pressure on the overall manufacturing sector. Consequently, a more conservative growth projection of 1.6% is forecast for 2025, representing a downward revision from the previous estimate of 2.3%.
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