German Steel Federation study: The steel industry at a crossroads

The study, conducted on behalf of the German Steel Federation, also provides well-founded empirical findings on how the transformation of the steel industry can contribute both to achieving climate targets and to strengthening the competitiveness of downstream industries. The results of the study are based on analyses of national accounts, interviews with experts and a survey of 192 steel users conducted in 2024.

The surveys and analyses clearly show that Germany as a steel location is at a decisive crossroads. The results make it clear that scepticism towards a successful transformation scenario has increased noticeably among customers in the steel industry. According to the surveys, a failure of the transformation would have a serious impact on investment and employment in the steel processing industries.

Nils Naujok, Partner Energy and Natural Resources at Oliver Wyman: ‘The steel industry is an essential part of Germany's value creation network and makes significant contributions to the industrial location through close networking. The decarbonisation of the steel industry offers enormous potential for Germany as an industrial location because the carbon footprint of customer industries can be significantly reduced through net-zero steel technologies. However, a failure of this transformation would have a serious impact on the gross value added of important customer industries and the future production capacities of the steel industry. The green transformation must therefore succeed so that it can pave the way for decarbonisation and strengthen the resilience of Germany as a business location.’

Hanno Kempermann, Managing Director of IW Consult: ‘Our analyses of economic sector interdependencies and our company survey of steel processors make it clear that steel is one of the core industrial sectors. A local steel industry is an important factor for the competitiveness of downstream industry, be it as a driver of innovation, higher sustainability standards or as a safeguard for quality advantages. If the steel industry moves away, parts of the downstream industries will also reduce their production at the location.’

Dr Martin Theuringer, Managing Director and Chief Economist of the German Steel Federation: ‘The study by Oliver Wyman and IW Consult comes at the right time. Against the backdrop of the current steel crisis, it makes it clear what is at stake, not only for the steel industry, but also for a large number of industrial networks, including the industrial co-shareholdings in Germany, which are highly steel-intensive. The study is therefore a further call to action: action must be taken now at German and EU level to reduce energy costs, create effective foreign trade and carbon leakage protection and establish lead markets for clean steel ‘made in Europe’.’

Source and Photo: German Steel Federation