Challenges in steel trade
Tough competition and falling prices
For a number of years, steel trade is a difficult market: Facing with a global overcapacity in steel production, the competitive pressure increases while prices are falling. Internationally, nearly one third of the capacity remains unused. Nevertheless, a further expansion of production facilities is expected – especially in the Asian countries. In contrast, the worldwide demand for steel is growing significantly slower than over the last years. Even in Germany, the economic upswing is generated primarly by private consumption and steel intense investments e.g. from the public administration fail to appear.
Traditional markets of German steel producers become less important. The reason for this is that the demand for steel stagnates mainly in Europe. After all, about 75 percent of the German foreign steel trade takes place in the EU. As a reaction, many countries outside Europe build up trade barriers to steel themselves against the growing pressure of competition.