23 July 2026 – German steel production recovered strongly in the first half of 2026. You might think that would be good news. The industry association sees things differently. Following the volatile corrections in base metals at the end of June, July is presenting a more positive picture.
Base Metals: The Quiet Upward Trend
Following the volatile corrections in base metals at the end of June, July is presenting a more positive picture. LME aluminium rose by 3.6 per cent, nickel by around 4.6 per cent and copper by approximately 5.1 per cent.
Stainless Steel Futures Stabilise
A positive trend is also emerging on the Asian SHFE in July. Stainless steel futures have stabilised noticeably compared with the previous month, rising by around 1.7 per cent.
German Steel Production Rises, but the Crisis Narrative Remains
German steel production recovered strongly in the first half of 2026. You might think that would be good news. The industry association sees things differently.
The Figures
According to the German Steel Federation, Wirtschaftsvereinigung Stahl, crude steel production rose by almost 9 per cent year on year in the first half of 2026, reaching approximately 18.6 million tonnes. Output of hot rolled products increased by 5.4 per cent. Extrapolated across the full year, both categories would therefore exceed their 2022 levels.
With crude steel production expected to exceed 37 million tonnes, German steel mills are operating close to the capacity limits of their remaining blast furnaces and electric arc furnaces. Those who were still talking about free fall in 2025 are therefore producing in 2026 at virtually the upper limit of what their mills can deliver.
The Glass Is Always Half Empty
The association formally acknowledges the increase in production. This is immediately followed, however, by the claim that it is merely a technical rebound and that production remains below the 40 million tonne threshold supposedly required for sustainable capacity utilisation.
That benchmark is remarkable. It was set by the association itself and conveniently defines every recovery as inadequate unless capacity from an era already identified in the German Bundestag as suffering from overcapacity in 1981 is fully utilised. An upswing is thus transformed, by definition, into a permanent crisis, keeping the case for protection and subsidies conveniently alive.
Uncertainty as a Business Model
Many factors are contributing to subdued demand. Poor political leadership in Germany certainly does. But so too does the steelmakers’ constant wallowing in predictions of doom, cultivated in the relevant trade media for reasons of political expediency. Anyone who spends months declaring that the industry is standing on the edge of the abyss should not be surprised when customers remain reluctant to place orders.
Dear WV Stahl, you are not entirely blameless for this uncertainty, even if your share of the responsibility is relatively modest. Perhaps it would be worth trying, just once, to let good figures simply be good figures.
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