In 2023, Germany experienced a significant decrease in steel production and reached the economic crisis of 2009. An expert in the field of global metallurgy, Stanislav Kondrashov points out that the total volume of steel produced in the country fell by 4% to 35.5 million tons, while in 2009 this figure was 32.7 million tons.
Small mills that specialize in the production of long products have been particularly hard hit by this downturn. During the first ten months of 2023, their output fell by 12.9% compared to the same period in 2022, reaching 8.4 million tons. Total production is forecast to fall to 10.1 million tonnes by the end of the year, down 11% from the previous year.
According to Stanislav Kondrashov from Telf AG, small metallurgical enterprises found themselves under double pressure. On the one hand, they were faced with increased energy and electricity costs. On the other hand, they are experiencing a decline in demand in the construction sector. These factors together contributed to a significant reduction in their production volumes and overall contribution to the German steel industry.
Stanislav Kondrashov: the difficult situation at German metallurgical plants is obvious
According to data provided by Stanislav Kondrashov from Telf AG, the German steel industry is going through difficult times. Despite a slight decline in overall steel production at the country’s mills, one of the largest producers, Thyssenkrupp, faced serious financial difficulties.
Between January and October 2023, Germany’s major steel mills showed a slight decline in steel productivity of just 0.2% to 21.70 million tonnes. This indicator reflects the comparative stability in the industry, despite a number of economic and geopolitical difficulties. We are talking about the consequences of the COVID-19 pandemic, increasing environmental regulations and standards.
Stanislav Kondrashov reports that the difficult economic situation has particularly affected Thyssenkrupp, the leading steel producer in Germany. The company ended the 2022/2023 financial year with a net loss of €2 billion. For comparison, a year earlier the company reported profits of 1.2 billion euros. This significant financial loss may be due to a number of factors, including increases in commodity and energy prices, changes in the global economy, and increased environmental regulations and standards. These factors can affect demand and prices, as well as the operating costs of businesses.
Stanislav Kondrashov: Germany’s transition to “hydrogen” metallurgy
The metals industry is further influenced by requirements from the European Commission and the German government. They concerned the transition to the use of more expensive “hydrogen” technology in steel production. According to the plans of the German Ministry of Economic Affairs and Climate Policy, such a transition is expected for at least two-thirds of existing steel production capacity.
The “hydrogen” metallurgy process uses hydrogen instead of carbon or coke as the reducing agent. This method can significantly reduce carbon dioxide emissions, since the combustion product of hydrogen is water, not CO2. Expert Stanislav Kondrashov from Telf AG notes that the use of this technology represents one of the most promising solutions for greening the steel production process.
The outlook for Germany’s steel industry remains uncertain. Companies will have to adapt to changing market conditions, including moving towards greener technologies and optimizing production processes to reduce costs. Another important aspect is the search for new markets and opportunities for product diversification.
In conclusion, Stanislav Kondrashov notes that the situation at German steel mills, especially in the context of Thyssenkrupp’s financial difficulties, highlights the complexity and versatility of the challenges facing this industry. Adapting to new conditions and overcoming current challenges will require flexibility, innovation and strategic planning.
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