Economic environment and course of business
EUROPE
Overall, economic development in Europe was very subdued in the first nine months of fiscal year 2025/26. Marginal GDP growth was driven primarily by the service sector, while industrial production largely stagnated at a low level and showed only slight signs of recovery toward the end of the reporting period. Private consumption remained largely stable without significant momentum.
In addition, changes in global free trade resulting from the US administration’s tariff policy dampened sentiment on the European market. At the beginning of the reporting period, tariff announcements led to uncertainty. In the course of intensive negotiations, an agreement was reached on flat-rate tariffs of 15% on all US imports from the EU. Unaffected by this, tariffs of 50% on steel imports into the United States remain in effect at the time of writing. The latter have had a negative impact on individual business areas of voestalpine in the fiscal year to date, with seamless tubes for the oil and gas industry being the most affected product segment within the voestalpine Group.
In this generally difficult economic environment, voestalpine continued to face subdued demand from the construction, mechanical engineering, and consumer goods sectors. Demand from the automotive industry was mixed: while deliveries of high-quality steel sheets remained stable at a good level, demand for automotive components continued to weaken during the reporting period.
The European markets for railway infrastructure, aerospace, and storage technology continued to develop positively, with sustained good demand for voestalpine products.
USA / NORTH AMERICA
Despite the start of the fiscal year, which began with tariff announcements, withdrawals, and negotiations with virtually all US trading partners, economic growth in North America remained intact at a good level in the first nine months of the current fiscal year.
Investments in artificial intelligence technologies contributed particularly to the positive overall development. Private consumption also remained stable at a good level. Momentum in the construction industry outside the AI-driven expansion was significantly lower, and industrial production also showed a stable trend at best.
In the third quarter of 2025/26, the longest government shutdown in US history led to a slowdown in economic growth, not least due to reduced government spending. In addition, no economic data was published during this phase, which made it difficult to assess the economic situation. However, recent data indicate that economic growth is likely to have remained largely stable and that any negative economic effects were primarily temporary.
In this environment, the North American locations of the voestalpine Group faced uncertainty and cautious ordering behavior on the part of customers for much of the current fiscal year. Business development in the Tooling and Automotive Components segments was correspondingly volatile. Demand for equipment for the oil and gas industry was low overall due to the low oil prices. For voestalpine, high import duties represented an additional obstacle in this market. In the aviation, railway systems, and storage technology segments, demand for voestalpine products was good in the reporting period.
BRAZIL / SOUTH AMERICA
Economic development in Brazil, voestalpine’s most important market on the South American continent, lost noticeable momentum during the first nine months of the 2025/26 fiscal year. The service sector and private consumption remained robust, and the agricultural sector also contributed significantly to overall positive economic growth. However, industrial production was impacted by high key interest rates (Selic rate: 15% at the end of the reporting period), which significantly affected domestic demand and investment. In addition, high levels of Chinese imports and reduced export opportunities to North America due to the US tariff regime had a negative impact on Brazilian industry.
Against this backdrop, voestalpine’s Brazilian special steel mill faced a significant decline in demand. Management responded to the resulting low capacity utilization with extensive cost-cutting measures. Demand also declined in some market segments within Tubes & Sections. In the Railway Systems segment, however, voestalpine’s Brazilian locations continued to experience strong demand.
CHINA
As elsewhere, the start of the 2025/26 fiscal year in China was marked by tariff disputes with the US. Before the world’s two largest economies entered into negotiations, an escalating spiral of tariffs, counter-tariffs, and export restrictions developed. Ultimately, however, an agreement was reached that remained in force at the time of writing.
China’s overall economic growth in the 2025/26 fiscal year remained positive and was largely driven by exports. In the domestic market, economic development was significantly more subdued overall and weakened noticeably toward the end of the reporting period. This divergence is clearly reflected in the performance of individual sectors. High-tech industrial production – including automotive and special machinery manufacturing – continued to grow, although momentum slowed as the fiscal year progressed. Private consumption and the construction industry have not provided any positive impetus for some time. In addition, investment activity in China declined sharply toward the end of the reporting period.
Policymakers and regulators did not implement broad-based economic stimulus measures. Instead, they introduced targeted measures aimed at stabilization and at supporting growth in high-tech industries in order to strengthen China’s position in these areas in global markets.
In this economic environment, performance at voestalpine’s Chinese locations was mixed. Due to intense competition among customers, the Automotive Components plants have faced weak demand since the beginning of the 2025/26 fiscal year. The market for Tubes & Sections also came under increasing pressure as the fiscal year progressed. Demand for high-quality tool steel remained positive for extended periods. For Railway Systems, however, the first three quarters of the 2025/26 fiscal year were satisfactory, even in China.