Significant Decline in Steel Production in Germany

Germany's steel industry is facing serious challenges as new data reveals a substantial decrease in domestic steel production. In the first half of the year, raw steel output fell by nearly 12% to 17.1 million tons, according to the Economic Association of Steel in Berlin. This decline highlights the tough competition from foreign markets and a sluggish domestic economy.

Comparing this year's figures to the previous years shows a stark contrast. In the first half of 2023, raw steel production had already dropped by 5%, and despite a slight recovery of 4.5% in the first half of 2024, the current figures indicate a worrying trend. The head of the Economic Association of Steel emphasized that the production drop reflects the dire situation of the industrial sector in Germany, marking levels reminiscent of the financial crisis in 2009.

The steel companies are particularly affected by weak domestic demand from crucial sectors such as construction, machinery, and the automotive industry. The head of the association called for a summit to address these issues at the highest political level, stressing the need for prompt and reliable implementation of measures already proposed, such as effective European trade protections and competitive electricity prices. High energy costs continue to hinder competitiveness significantly.

There is a pressing need for political action to ensure that energy-intensive industries, including steel, can access competitive and sustainable electricity prices over the long term. One immediate step suggested is the rapid reduction of transmission network fees.

Germany's steel sector has been under pressure for some time. Thyssenkrupp Steel Europe, the largest domestic steel producer, is struggling with financial losses and has begun reducing its workforce substantially. The company, which employed 27,000 workers at the start of the year, aims to reduce this number to 16,000 by 2030. This workforce reduction will occur through a combination of capacity cuts, layoffs, and the outsourcing or sale of parts of the business.

Recently, the management reached an agreement with the labor union IG Metall on a stringent cost-saving plan, which includes an average salary reduction of 8% for employees.