DÜSSELDORF (dpa-AFX) – According to a new study, relocating domestic steel production abroad would result in economic losses worth billions in the event of a crisis. This is the result of an analysis by economists at the University of Mannheim, which was funded by the trade union-affiliated Hans Böckler Foundation. It was available to the German Press Agency in advance.
According to this, the German economy could face an annual loss of up to 50 billion euros in added value if it were caught in a global “steel shock” without domestic steel production. The authors are referring to a scenario in which large steel exporters such as China would significantly reduce their exports to Europe in a short period of time due to geopolitical conflicts or supply chain problems.
Study: Without domestic production, steel would become more expensive in the event of a crisis
In such a case, downstream industries such as the construction industry, metal production, mechanical engineering, electrical engineering or the automotive industry would have to pay significantly more for steel. “This cost increase would reduce production and thus value creation in these sectors,” it said. Such a crisis would also reduce household incomes, which in turn would affect domestic demand.
“But even a gradual decline in the steel industry would have economic and political consequences,” write study authors Tom Krebs and Patrick Kaczmarczyk. Steel-intensive regions such as Duisburg, Eisenhüttenstadt, Bremen and Saarland would be particularly affected. Experiences from the USA and Great Britain show that economic decline in industrial regions is often accompanied by a strengthening of right-wing populist movements. “This also applies to Germany: a policy that abandons key industries not only weakens the economy, but also democratic stability.”
Study: At least 40 million tons of steel are needed every year
In the long term, economic researchers believe that production of at least around 40 million tons per year in Germany is necessary in order to reliably cover demand. For comparison: around 37 million tons of crude steel were produced in Germany in 2024. According to the study authors, half of the target quantity should be produced via low-CO2 direct reduction, while the other half should be melted from steel scrap in electric furnaces. In this context, the researchers called for more investment in systems for more climate-friendly steel production.
A “steel summit” will take place in the Federal Chancellery on Thursday. This should be about measures to increase the competitiveness of the German steel industry./tob/DP/zb
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