Steel production in Germany reached a historically low level in 2023 due to weak demand and internationally uncompetitive electricity prices. Even in December 2023, the decline in crude steel production continued, with a fall of 2.3 percent compared to the previous year. This negative trend, which has been in place since the beginning of 2022, continued in the fourth quarter of 2023, with production around 5 percent below the previous year's level.
The total production of steel in Germany in 2023 amounted to just 35.4 million tonnes, the lowest production volume since the financial market crisis in 2009. Although a rapid recovery followed a sharp slump due to the recession, the current scenario paints a different picture.
The decline in electrical steel production was particularly dramatic, falling by around 11% to 9.8 million tonnes last year - even below the level of the financial market crisis in 2009 (11.3 million tonnes). The weak construction sector combined with high electricity prices left a particularly clear mark on this electricity-intensive production sector. Oxygen steel production was also only able to stabilise at an extremely low level last year.
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.”
CO2 neutrality by 2024
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.”
The German Steel Federation, as the voice of steel-producing companies in Germany, has set itself the goal of producing CO2-neutral steel by 2045 and reducing one third of total industrial greenhouse gas emissions. Headquartered in Berlin, the association is committed to a political framework that enables a climate-neutral steel industry that remains strong. At around 40 million tonnes per year, Germany has the largest steel production in Europe.
