For the steel industry, the downward trend in crude steel production continued at the end of 2023. Production fell by a further two percent in November compared to the same month last year. For the year as a whole, it is heading for a loss of four percent, after a decline of around eight percent in 2022. This means that 2023, with 35.5 million tons of crude steel production, is likely to be one of the weakest years in terms of production in the steel industry in Germany - just the year The great financial crisis in 2009 was associated with even lower production.
In detail
Electrical steel production is particularly affected. Crude steel production on this scrap-based and therefore particularly electricity-intensive route has collapsed by 11 percent this year, falling to a historic low of 10.1 million tons (annualized). The last time production fell below this low level was thirty years ago. Compared to the year before the energy price shock began, production has lost almost 20 percent.
It is not just the collapse in production itself that is causing concern, but also the duration of the recession accompanying this development: on an annual basis, there have been steady declines in production since March 2022 and therefore for almost 21 months (with the exception of a slight increase in September 2023). . In the cyclical and volatile steel industry, such a long negative cycle has never been observed in Germany.
Kerstin Maria Rippel, General Manager of the Steel Association, said: “This year's production data gives rise to the greatest concern: steel production is currently in free fall. Although both production routes are affected, electric steel production is particularly suffering due to the persistently high electricity prices combined with a persistently weak economy.
The latest budget compromise by the coalition partners, which included, among other things, the elimination of the state subsidy for transmission network fees, takes us far away from the actual goal of competitive electricity prices: With the now announced doubling of transmission network fees, companies' electricity procurement costs will be significantly increased further.
The steel industry will not calm down without a solution for competitive electricity prices being found, explains the managing director. “Politicians must therefore continue to face their task of creating affordable electricity prices with high pressure!”