According to the annual report of the German Steel Federation, WV Stahl, Germany's steel industry remained under significant pressure last year due to weak demand from key consumers, growing imports, high energy costs, and the complexity of decarbonization. The industry must simultaneously maintain global competitiveness and prepare for the transition to low-carbon steel production. This is an important signal for the European market, as Germany is the largest steel producer in the EU and accounts for a significant share of demand for raw materials, energy, and rolled metal products.
Steel Production and Capacity Utilization Status
In 2025, German crude steel production reached 34.1 million tons. This is below the 40-million-ton threshold that the industry considers necessary for sustainable utilization of production capacities. Such a gap indicates underutilized plants and ongoing margin risks for manufacturers.
Around 70% of German steel is produced via the oxygen-converter route, while the remainder comes from electric arc furnaces. It is this production structure that makes the transformation capital-intensive, as companies need to invest in new technologies, energy infrastructure, and climate-neutral processes. At the same time, in January–April 2026, Germany produced 12.49 million tons of steel, a 9.1% year-on-year increase, though this does not alleviate systemic pressure on the sector.
Impact on the Rolled Metal Market and winox.ua Solutions
Weak demand from the automotive, mechanical engineering, and equipment manufacturing sectors directly impacts steel plant orders. For metal buyers, this means the market remains highly sensitive to changes in the industrial cycle, energy costs, and import competition. Even with some signs of production recovery, it is crucial for businesses to plan procurement considering potential price volatility and delivery times.
Under these conditions, winox.ua helps industrial clients mitigate purchasing risks through reliable supplies of rolled steel, stainless steel, and non-ferrous metals. The company focuses on working with certified manufacturers and suppliers, ensuring high product quality and predictable service. For enterprises relying on consistent metal supplies, this business model serves as a practical tool to hedge against market fluctuations.
Energy Costs and Decarbonization Challenges
WV Stahl notes that energy prices remain a key pressuring factor on Germany's steel sector. Electricity grid transmission fees rose by approximately 130%, creating an additional annual cost of about €300 million for the sector. Although Germany decided to subsidize these fees starting early this year, the current industrial electricity support scheme does not yet provide sufficient relief due to EU state aid rules and limitations.
The industry association calls for a competitive industrial electricity price capped at €50/MWh, including grid fees and surcharges. This is critical for steelmakers, as transitioning to low-carbon steel requires substantial amounts of affordable electricity. Without a predictable, long-term energy policy, investments in new capacity remain high-risk.
What the Situation Means for Industrial Buyers
The German steel sector is entering a period where technological readiness for decarbonization meets the urgent need for clear policy decisions. If regulatory and energy conditions stabilize, 2026 could be the year when previously prepared investment projects begin to yield results. However, for metal buyers, the key takeaway remains the need to diversify supply sources and closely monitor European price signals.
For Ukrainian manufacturing, construction, and engineering companies, developments in Germany have practical implications. Shifts in the EU's largest steel economy affect the availability of specific products, logistics, and steel price expectations. This is why partnering with a supplier who understands market dynamics and ensures predictable procurement conditions, such as winox.ua, becomes a vital part of an industrial strategy.