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Germany

The first three months of the 2024 financial year were characterized by inconsistent sales price developments on the German recycled steel market. A favourable export market, declining recycled steel volumes and a slight upturn in crude steel production (despite persistently weak demand) all supported scrap prices without a clear trend becoming apparent. In March, recycled steel prices lost most of their gains as interest from export markets waned and domestic finished steel prices continued to suffer from weak demand from downstream industries, import pressure and global overcapacity.

Supply remained difficult for the recycling industry, particularly for old grades of recycled steel. The construction industry continued to suffer from a poor order situation, which led to a seasonal but normal decline in demolition activity. 

In the first three months of 2024, German steelworks produced 9.7 million tonnes of crude steel, or 6% more than in the same period of last year. According to the German steel federation (Wirtschaftsvereinigung Stahl), the increase in production by electric steel manufacturers was higher at 9.4% than that by oxygen steel manufacturers at 4.6%, giving the former a 30.2% share of the total.

As reported by the leading economic research institutes in their latest joint forecast, Germany’s economy will have stagnated in the first quarter of 2024. The ongoing phase of economic weakness is accompanied by dwindling growth forces, with economic and structural factors currently overlapping. The construction industry in particular is in a fundamental crisis; the downtrend in building permits is continuing and German residential construction is suffering from a lack of orders as well as cancellations.

Leading economic institutes expect private consumption to become the most important economic driver for the rest of the year against the backdrop of falling inflation rates, rising wages/incomes and a continuing stability in the labour market. According to the analysts, increasing foreign trade stimuli could provide additional support for economic recovery from the middle of the year. However, such expectations are subject to numerous uncertainties, particularly with regard to geopolitical developments.

The worldsteel organization anticipates a recovery in overall demand for steel, albeit from a very low base. For Germany, worldsteel only sees opportunities for a recovery from 2025 - but even then, German demand for steel is unlikely to significantly exceed the low level of 2020.