Germany

In the second quarter of 2026, the German economy remained far from experiencing a sustained recovery. High energy costs, geopolitical uncertainties, rising protectionism and weak export demand weighed on industry. At the same time, government infrastructure programmes prevented a more severe economic downturn. Although business sentiment stabilised slightly, investment and employment remained under pressure. For the recycling sector, this meant that industrial recycled steel volumes remained low amid considerable uncertainty regarding future economic developments.

The German recycled steel market proved to be robust overall in the second quarter. Demand from steelworks remained largely stable and was underpinned by increased crude steel production. Although recycled steel volumes were higher than at the start of the year, supply remained tight - particularly for new recycled steel and turnings. At the same time, unreliable rail logistics, limited lorry capacity, lock maintenance and, at times, low water levels hampered the efficient supply of recycled steel to mills. Thus, logistics increasingly became a key competitive factor throughout the entire supply chain.

In the second quarter, the European steel market was characterised by a tension between limited supply and weak end-user demand. Mills maintained their production discipline and prepared for the stricter EU safeguard measures due to come into force in July, while service centres and fabricators largely purchased on the basis of their needs. Infrastructure projects provided some stabilisation but there was no broad-based revival in demand.

According to the German steel association Wirtschaftsvereinigung Stahl, domestic crude steel production rose 8.8% year on year to 15.7 million tonnes in the January-May period. While oxygen production increased significantly, electric steel production declined.

For the German recycling industry, the operating environment is set to remain challenging in the second half of the year. The EU’s new protective measures are likely to improve capacity utilisation at European steelworks and thus, in principle, underpin demand for recycled steel. At the same time, the weak industrial economy, seasonally declining recycled steel inflows and persistent logistical bottlenecks are limiting the market’s potential. Additional uncertainty is stemming from the volatile performance of the Turkish deep-sea market and geopolitical risks.

For recyclers, security of supply, efficient logistics and the ability to adapt to market conditions are increasingly becoming the decisive competitive factors.