European Steel Production Hits All Time Low

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

European Union (EU) steel exports fell by 20% in the first half of 2026, while EU steel production declined to a historic low of 125.8 million tonnes (MT).

Exports and Production Fall

EU steel exports fell sharply in the first half of 2026 while crude steel production continued to falter, reaching a historic low of 125.8 million tonnes (MT) in 2025.

Europe's steel market remains under "significant pressure", according to the European Steel Association (EUROFER), with exports falling sharply, production at historic lows and demand expected to remain almost flat in 2026. Looking ahead, its latest Economic and Steel Market Outlook 2026-2027 report found that apparent steel consumption is forecast to grow by just 0.1% in 2026, before increasing by 2.3% in 2027. According to Industrial Info Resources data there are 1,430 projects across the European metals sector worth more than US$101 billion in investment. 

Key Reasons

The disappointing performance of the region's struggling steel sector has been blamed on increasing energy prices, the 50% tariffs on EU steel imposed by the U.S. and an oversupply of cheap products from China. Axel Eggert, EUROFER'S director-general said: "The 20% fall in exports is an alarming signal of the pressure facing European steel. Combined with production at historic lows and persistently high energy costs, it shows that Europe's industrial recovery is far from secured. The new EU steel trade measure is an essential first step. Now we need to build on that progress with an industrial recovery that works across regions and across the value chain, bringing back production, investment and quality jobs in Europe."

State of the Industry

Crude steel production fell by 2.9% to a record low of 125.8 MT in 2025 and declined by a further 1% in the first five months of 2026. Capacity utilization improved slightly to 67% from 65% in 2025, but remained low in historical terms. EUROFER does not expect production to return to the performance levels of its strongest year in 2015, when it hit 155 MT. At the same time, EU steel exports to third countries fell by 20% in the first six months of 2026. They declined across major international markets, including the U.S.  (-29%), India (-24%), Turkey (-21%) and China (-18%). Despite a decline in imports over the same period, the EU remained a significant net importer of steel. Apparent steel consumption increased by 1.5% in the first quarter of 2026, but the recovery is expected to lose momentum.

High Energy Costs

Energy costs have risen sharply during 2026, adding further pressure on Europe's energy-intensive industries, EUROFER reported. European gas prices have fluctuated around 50 euro (US$56) per megawatt hour (MWh), reaching peaks of around 80 euro (US$90)/MWh in recent weeks - 132% higher than at the start of the year. "The renewed increase in energy prices is weighing on industrial competitiveness at a time when manufacturing activity remains fragile," EUROFER stated. 

European Measures

This summer, the EU introduced safeguards for the steel industry, slashing the amount of tariff-free steel imports by almost half to 18.3 MT/yr and doubling the tax on out-of-quota steel imports to 50%. The measures apply to 30 categories of steel products imported to the EU from July 1 and are designed to protect Europe's struggling steel industry from the negative effects of a global steel surplus and cheap Chinese imports. The regulation introduced a "melt and pour" rule, under which the origin of steel is determined by where it is first melted and cast, strengthening traceability and limiting circumvention through minimal processing in third countries. According to Industrial Info Resources data, there are more than 600 steel mills and smelters in Europe, led by Germany, France and Italy. The sector employs 298,000 people directly and another 2.5 million in associated industries. According to EUROFER's new president, Geert Van Poelvoorde, chairman of the board of ArcelorMittal Europe Steel, the safeguards put in place this summer have the potential to see 15 MT of European steel production to return annually. "Early developments are encouraging, with capacity being restarted despite continued weak demand. And major investments in low-carbon steelmaking are taking place across Europe where the right conditions are in place."

Key Takeaways

• EU steel exports fell sharply in the first half of 2026 while crude steel production hit a historic low of 125.8 million tonnes (MT) in 2025.
• The figures were blamed on increasing energy prices, the 50% tariffs on EU steel by the U.S., and a flood of cheap products from China.
• Industrial Info Resources is tracking 1,430 projects across the European metals sector worth more than US$101 billion in investment. 

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).