Germany

The German economy saw little movement in the third quarter of this year. There was modest growth at the beginning of 2025 but GDP has since stagnated, with only certain export-oriented specialist segments providing support. Economic sentiment across the country remains subdued; both the construction sector and private demand have been weak, and industrial investment has been restrained.

Notably, there is a lack of fresh political impetus. Announced measures from the new federal government have yet to be implemented or are not yet having any tangible effect, causing increasing disappointment among businesses. While falling inflation rates and interest rate cuts by the European Central Bank have provided some relief, these factors alone are insufficient to initiate a genuine turnaround in economic momentum.

In the first eight months of 2025, German crude steel production declined by approximately 12% year on year. Blast furnaces were particularly affected as high energy costs and CO₂-related expenses continued to undermine competitiveness. Although electric steel plants benefited from lower recycled steel prices, they also faced weak demand from the construction industry and only moderate orders from the automotive sector. Overall, production capacity utilisation remained at a low level, significantly dampening demand for recycled steel.

Germany’s recycled steel market faced ongoing downward pressure on prices throughout the third quarter. Prices fell again after a brief period of stability in August, mainly because of weak domestic demand - particularly from rebar producers, who reduced their purchased volumes in response to the cancellation or postponement of construction projects.

At the same time, recycled steel export opportunities became less attractive: Turkey showed limited willingness to buy and pushed for lower price levels. A strong Euro further exacerbated the competitive disadvantage for Germany’s exporters.

EU-wide discussions about potential export restrictions on recycled steel added to the uncertainty in the market. In addition, inexpensive semi-finished imports from Asia increased pressure on German plants, which in turn negatively impacted their recycled steel purchases.