In the business year 2023/24, the European steel market was dominated by the European Central Bank’s sharp interest rate hikes. It raised the base rate to 4.5% by September 2023, triggering a significant economic slowdown in many market segments. The construction industry, which is one of the largest steel-consuming industries, was particularly hard hit. As a result, demand for steel in Europe was very subdued overall in the reporting period.
In this subdued economic environment, the Steel Division, with its focus on technologically sophisticated products, performed consistently well. Although it was unable to escape the generally low demand from the construction, mechanical engineering, and white goods segments, demand for the division’s products was good in the strategically important automotive and energy sectors.
Overall, the Steel Division’s development of shipment volumes was satisfying in the business year 2023/24, although demand was somewhat subdued in both the second and third quarters of 2023/24. During these phases, some competitors had to shut down production capacities. By contrast, the Steel Division benefited from the relatively stable demand from the high-tech segments of the energy and automotive industry, where volumes were increased via active marketing.
While the European automotive industry was still suffering from problems in international supply chains in recent years and was unable to fully utilize its own production capacities, the situation eased from the start of the business year 2023/24. As a result, demand improved significantly. This continued even after the automotive manufacturers had worked off their order backlog, ensuring good capacity utilization in this segment throughout the business year.
Electromobility continues to provide strong impetus. This led to numerous bookings of electrical steel for long-term projects in the electrical industry segment. Demand in the consumer goods and household appliances industry remained low over the course of the reporting year. Following the boom during the COVID-19 pandemic and the current weak development of the construction industry, the business year 2023/24 saw restrained development at a low but stable level.
The market cooled in the mechanical engineering sector, which became increasingly noticeable over the course of the business year 2023/24.
A comparatively small market segment for the Steel Division is the construction industry, where the situation deteriorated due to rising interest rates and financing costs. This trend continued throughout the business year 2023/24 and stabilized at a low level from the third quarter of 2023/24.
There were positive developments in the energy sector. The Heavy Plate business unit in particular reported good order intake for the business year 2023/24. The business unit benefited from the very good project landscape.
The prices of important raw materials for steel production such as iron ore and metallurgical coal largely moved sideways in the first half of 2023/24, while the third and fourth quarters were characterized by volatility. Steel prices on the European spot market stabilized after an initial downward trend in Northern fall 2023. From this point onwards, price increases prevailed—also supported by higher raw material prices. After peaking in the fourth quarter of the business year 2023/24, prices on the European steel market fell again. The price trend in the Steel Division was much more stable over the course of the reporting period, as steel products are sold exclusively via contract transactions and not on the spot market.
