After 31 years, DAX veteran Thyssen-Krupp descends from Germany's leading index, world market leader ArcelorMittal cuts back production at several locations, Salzgitter and Voestalpine suffer slumps in profits, Schmolz Bickenbach repeatedly collects its profit forecast and Klöckner & Co. is in the midst of restructuring. It is easy to see that the steel industry is in crisis.
European demand for steel fell by 7.7% year-on-year in the second quarter of 2019. But it is not only the economy that is weighing on the industry: it is undergoing structural change, because even in peak phases steel consumption is growing only moderately. Steel is increasingly being replaced by alternatives. Added to this are rising energy and CO2 emission costs, which are impairing competitiveness in the global market.
Our current industry snapshot highlights the current causes of the crisis and the prospects for the German steel industry.