A weak demand combined with high electricity prices that could not compete at an international level has caused German steel production in 2023 to sink to a historic low. The downward movement in the production of raw steel was also recorded in December 2023. Compared to the previous year, production shrank by 2.3 percent. This continues the negative trend which started in the beginning of 2022. In the fourth quarter of 2023, production remained approximately 5 percent below the corresponding level of the previous year.
In the year 2023, not more than a total of 35.4 million tonnes of steel was produced in Germany. This is the lowest production volume since the financial crisis of 2009. But back then, after a hard plunge caused by the recession, the course was quickly reversed.
In the past year, the production of steel in electric arc furnaces has decreased the most. With a minus of approximately 11 percent leading to a total of only 9.8 million tonnes, this dips further than even the previous low during the financial crisis. At that time, the electric production of steel reached 11.3 million tonnes. A slump in construction combined with high prices for electricity has disproportionately affected this electricity-intensive production route. But the production of oxygen steel, too, was only able to stabilise last year, and that at an extremely low level.
Kerstin Maria Rippel, chief managing director of the German Steel Association: “The annual balance of steel production in Germany clearly demonstrates that the situation of the steel industry – and especially electrical steel production – is indeed dire. There is an undiminished urgent need for political action: Most acutely regarding the cost of electricity, which is still not able to compete, and which since the beginning of this year is higher than ever due to double grid usage fees for transport.”
The Federal Government should also urgently create a solid financial base for the transformation towards carbon neutrality, which since the ruling by the Federal Constitutional Court has been called into question, Rippel continues. “We need a clear political concept on how the path to carbon neutrality is to be financed in a reliable manner. This is a central building block for any plans to further the transformation of the steel industry and the decarbonisation of our country.
