Germany’s crude steel production and consumption in 2021 would witness an increase of 10.9pc (or 37.5mn mt) and 6.2pc, respectively, but is unlikely to reach pre-pandemic levels, said a ‘Steel Report’ by RWI- Leibniz Institute for Economic Research on October 12. German steel industry is targeting a capacity utilization rate of 75pc by 2021.
The crude steel production has been declining since 2018 which was initially supported by reducing working hours and productivity.
Crude steel production in January-August period this year was 16.5pc less than prior year. Germany’s crude steel production is likely to decline by almost 15pc in 2020.
The industry is facing demand and supply related headwinds as the country is focusing on overseas demand with local production facilities switching to e-mobility — which could impact the automotive supply chain. This could lead to structural overcapacities for the industry, the report said.
Production of “Green Steel” is the major challenge faced by the German steel industry as the transitional change in steel production not only requires time but also considerable investments which could be difficult to finance given the current economic slump.
However, the government’s assistance could help the industrial emitters to reduce their carbon emissions conforming to German climate targets.