Europe’s steel industry faces far-reaching change
High energy costs and international competition are putting the sector under pressure
According to a study by PwC, traditional blast furnace production in Europe will become economically unviable by 2040.
The consultancy firm’s study identifies opportunities for the European steel industry primarily in recycling, international supply partnerships and specialised products with high added value.
PwC examined three possible development pathways: a large-scale relocation of primary steel production abroad; a balanced transition involving European production capacity and imports; and a largely self-sufficient European supply. Which path prevails will depend largely on energy prices, industrial policy and the costs of low-carbon processes.
According to the study, the production costs for low-carbon steel in the Gulf states and India could be significantly lower than those of European manufacturers. At the same time, around half of the announced European green steel projects have been postponed, halted or scaled back.
PwC sees potential for Europe in secondary steel produced from scrap, as well as in specialised, knowledge-intensive products. Steel processors should differentiate themselves more strongly through design, precision, certification and system integration. Small and medium-sized enterprises must also secure access to competitively produced low-carbon steel at an early stage.
