From 40% to Less Than 10%! The Shift in Europe's Global Stainless Steel Status

Europe's stainless steel industry has undergone a transition from a dominant player to a follower in the global landscape. According to industry data analysis, 25 years ago, Europe accounted for approximately 40% of global stainless steel production. By 2025, this share has dropped to less than 10%. This change reflects a fundamental restructuring of the global stainless steel production landscape.

The development of the global stainless steel industry can roughly be divided into three stages: the initial stage from the early 20th century to the 1950s, the development stage from the 1950s to the mid-1980s, and the stage from rapid development to slowing growth from the mid-1980s to the present. Europe's golden era in stainless steel was primarily concentrated in the second stage and the early part of the third stage. With the rise of Asian countries, particularly China, Europe's global share began a continuous decline.

By 2025, the weakness of the European stainless steel industry is particularly evident. Global stainless steel production is expected to grow by approximately 4%, with Europe projected to be the weakest performing region worldwide. In contrast, Indonesia and China are expected to achieve growth of 20% and 3%, respectively.

External Competitive Pressure

The most significant challenge facing the European stainless steel industry comes from the intense competition posed by Asian producers. China and Indonesia have collectively become the dominant forces in global stainless steel production. It is particularly noteworthy that China's Tsingshan Group now accounts for 30% of global stainless steel production, and its share in austenitic stainless steel is as high as 40%.

The formation of this competitive landscape is closely related to the cost advantages of Asian producers. Taking Indonesia as an example, local producers can leverage abundant nickel resources (a key raw material for stainless steel production) and lower energy and labor costs to gain a competitive edge in the global market.

Internal Structural Issues

The internal challenges confronting the European stainless steel industry are equally severe. According to a report by the European Commission's Joint Research Centre (JRC), there is a massive gap of up to 25% between the EU's internal stainless steel production capacity and demand. This means the European market heavily relies on imported products to meet local demand, further weakening the competitiveness of domestic producers.

The energy crisis has exacerbated the difficulties for Europe's stainless steel industry. For instance, the century-old French glassware brand Duralex saw its energy bill reach 46% of its revenue, forcing it to announce the shutdown of its production base. In energy-intensive industries, energy costs account for as much as 26% of costs in the metals sector, placing European producers at a significant disadvantage in terms of costs.

In March 2023, the Spanish stainless steel producer Acerinox shut down its steel plant in Cádiz and laid off 85% of the plant's employees. Subsequently, several steel manufacturers in Germany, the UK, and Belgium also announced production stoppages or output reductions. These events indicate that the European stainless steel supply chain is "on the verge of collapse."

The shift in the global standing of Europe's stainless steel industry is a structural, rather than cyclical, process. The decline from a 40% share of global production to less than 10% reflects the impact of multiple factors, including the restructuring of global industrial division of labor, shifts in regional competitiveness, and changes in energy cost structures.

Although the EU is attempting to stem the decline through trade protection measures and adjustments to industrial policy, under the dual pressures of Asian production cost advantages and technological progress, the European stainless steel industry is likely to continue on a development path characterized by specialization and high value-added products. Its share of the global total volume is expected to shrink further.

This transition represents not only a change in the geographical landscape of the industry but also a concentrated reflection of global supply chain restructuring, the impact of energy policies, and shifts in the elements of competitiveness. It holds cautionary implications for the global manufacturing landscape.