The European steel industry forms quite a big part of the overall EU economy. Employing about 306,000 workers and with a turnover of approximately €130 billion, production levels stand at about 152 million tons of steel per annum. The industry itself also plays a vital overall roll in environmental sustainability. Apart from all of the good news, the industry does face its share of challenges. To try and combat some of these challenges, the Steel and Metals Action Plan has been set into place.
A costly method of conducting business
ArcelorMittal MT.LU, Outokumpu OUT1V.HE and Aperam APAM.AS warned of mounting pressures from tariffs and weak demand, as the outlook for European steelmakers worsened following a mixed second quarter. ArcelorMittal’s quarterly core earnings were broadly in line with market expectations, while Outokumpu and Aperam beat analysts’ estimates but projected lower earnings for the third quarter. Their shares fell between 4% and 5% by 1100 GMT.
They followed peers AcerinoxACX.MC and SSABSSABa.ST, which last week missed expectations and flagged that trade tensions and economic softness were dragging on the sector. The results paint a cautious picture for the rest of the year. While quarterly earnings held up better than feared, steelmakers are bracing for falling demand and price volatility as U.S. tariffs distort trade flows and feed a weakening sentiment.
The companies have warned that U.S. President Donald Trump’s 50% tariffs on steel imports could divert U.S.-bound shipments towards Europe, leading to steeper price declines in a region already struggling with competition from cheaper Asian imports. ArcelorMittal, the world’s second-largest steelmaker, stood out with its relatively more resilient forecast for Europe, while Outokumpu and Aperam struck a more downbeat tone similar to Acerinox and SSAB a week earlier.
An interesting pricing structure
Outokumpu sees continued price pressure and sluggish demand on the continent. Its CEO Kati ter Horst said low-priced imports from Asia and elevated energy costs would continue to weigh on the stainless-steel maker. Kati ter Horst has held the reigns as CEO and President of the Outokumpu Corporation since October 2024. She has been on the Board of Directors since 2016 and has also been the Vice Chairman since 2022.
“There is no real strong demand out there in the market,”
Outokumpu CFO Marc-Simon Schaar told Reuters, after the Finnish company projected 5-15% drop-in stainless-steel deliveries for the third quarter, mainly due to weakness in Europe.
Aperam also flagged high uncertainty for the rest of 2025 that would likely lead to a sequential profit decline. “In Europe demand remains persistently depressed,” Aperam CEO Timoteo Di Maulo said. Di Maulo has been at the helm of Aperam as CEO since the start of 2015. His experience in this specific industry is extensive. It ranges from purchasing, logistics, controlling as well as on to commercial areas.
Working to expand the overall demand
However, ArcelorMittal is seeing more resilience in European demand than in other regions, aided by its exposure to the automotive sector, which CFO Genuino Christino said was holding up relatively well despite a slowdown in global car demand. The divergence between ArcelorMittal’s relatively upbeat tone on Europe and its peers’ gloomier views underscores the uneven dynamics across subsectors and geographies.
Luxembourg-based ArcelorMittal lowered its forecast for global steel demand growth outside China to between 1.5% and 2.5%, highlighting slower activity in the U.S., though it also trimmed down its estimate for Europe. It also raised its estimate of the financial impact from U.S. tariffs and now expects them to reduce its core profit by $150 million this year.
As it is evident from all of the above, there is quite a bit to worry about. Global trade tensions have also wreaked its share of havoc on matters. The trade tension between China and the US may also pose a significant risk to the 2025 demand in the industry. The only way to possibly mitigate these situations may be to look at more adaptive measures as well as innovative strategies for the industry and also to ensure its long-term sustainability.
GCN.com/REUTERS.