German steel production falls to historically low level in 2023

Weak demand combined with high and internationally uncompetitive electricity prices have pushed steel production in Germany to a historically low level in 2023. The downward trend in crude steel production continued in December 2023. Compared to the previous year, production fell by 2.3 per cent. The negative trend that has been ongoing since the beginning of 2022 is thus continuing. In the fourth quarter of 2023, production was around 5 per cent below the previous year's level.

Only 35.4 million tonnes of steel were produced in Germany in 2023. This is the lowest production volume since the financial market crisis in 2009, although things picked up again quickly after a sharp slump due to the recession.

Electrical steel production fell particularly sharply last year. With a drop of around 11% to 9.8 million tonnes, it even fell below the low point reached during the financial market crisis. At that time, electrical steel production stood at 11.3 million tonnes. Weak construction activity combined with high electricity prices had a particularly significant impact on this electricity-intensive production route. However, oxygen steel production was also only able to stabilise last year, and at an extremely low level.

Kerstin Maria Rippel, Managing Director of the German Steel Federation, commented: "The annual balance sheet for steel production in Germany clearly shows that the situation for the steel industry - and the electric steel route in particular - is very serious. There is still an urgent need for political action here: most acutely with the still uncompetitive electricity costs, which are higher than ever before with the doubling of transmission grid fees since the beginning of the year."

The German government also urgently needs to put the financing of the transformation to climate neutrality, which has been in question since the judgement of the Federal Constitutional Court on the Climate and Transformation Fund, on a solid financial footing, Rippel continued: "We need a clear political concept on how the path to climate neutrality is to be sustainably financed. This is a key building block for advancing the transformation of the steel industry and the decarbonisation of our country as a whole."

Source: WV Stahl, Photo: Fotolia