Crude steel production in Germany in 2023 fell by 4 percent year-on-year to 35.5 million tonnes due to the energy crisis and the weak economy, according to preliminary figures published by the German Steel Association on Tuesday.
It said that 2023 is set to be “one of the weakest years in terms of production.” Following an 8 percent slump in 2022, production was only lower during the financial crisis back in 2009.
“Steel production is currently in free fall,” Kerstin Maria Rippel, the association’s managing director, said in a statement. Such a protracted negative cycle has not yet been observed in Germany and the data would “give cause for great concern.”
Electric steelmaking, a highly energy-intensive industry branch, was particularly affected, recording a slump of 11 percent to a record low of 10.1 million tonnes.
Caught in the downturn, German steel producer Thyssenkrupp recorded a net loss of 2 billion euros (2.2 billion U.S. dollars) in fiscal 2022-2023 due to write-downs in its steel business. In the previous year, the company still made a profit of 1.2 billion euros.
The write-downs had become necessary due to higher capital costs, the recession and the “structural changes specific to the steel industry,” Thyssenkrupp said when publishing the figures at the end of November.
As part of Germany’s ongoing energy transition, the steel industry is seeking to become CO2-neutral by 2045, saving one-third of the country’s industrial greenhouse gas emissions.
To support the green transformation, the steel industry in the federal state of Saarland alone will receive around 2.6 billion euros by 2027, the Ministry for Economic Affairs and Climate Action (BMWK) said on Tuesday.
In a first step, the participating companies will convert around two-thirds of their production from coal-based blast furnace production to hydrogen-based steel production, according to the BMWK. (1 euro = 1.10 U.S. dollar)