en.Wedoany.com Reported - Although the European steel industry still faces challenges from declining demand and high energy prices, recent government support measures have made the region more attractive to investors. This view emerged from the Kallanish Europe Steel Markets 2026 conference held in Vienna, where participants made these remarks.
Industry representatives noted that steel companies are seizing a unique opportunity to leverage profitability growth to upgrade production assets and achieve decarbonization. It is estimated that by 2027, industry profitability could double compared to 2025 levels. Higher profitability is expected to make restarting idled capacity and new investment projects more attractive.
However, new investments could lead to supply-demand imbalances. In greenfield projects, approximately 14 million tonnes of flat product capacity may be added annually.
Matthias Winkler, Director at ING Bank, stated that banks are willing to provide financing, but the steel industry struggles to compete with more attractive sectors such as artificial intelligence in attracting investment. He believes government support is becoming increasingly important in securing financing. The stronger the confidence in the long-term effectiveness of protection mechanisms such as CBAM (Carbon Border Adjustment Mechanism), the more confident banks are that steel companies can repay loans.
Meanwhile, promising investment niches exist in specific product areas. Adrian Senecki, Vice President of Weglokoks, pointed out that the Polish steel plant Huta Częstochowa was revived precisely through the company's investment and support from the Polish Ministry of Defense. The company identified promising prospects for heavy plate production and restructured this bankrupt enterprise. Although the defense industry is one of the key target markets, it is expected to account for only about 7% of sales, with profits not exceeding 12%. Another approximately 10% of supply will go to the energy sector, while construction and infrastructure projects will remain the largest consumers of products.
Luciana Filizzola, Director of Sustainability and Communications at GMH Gruppe, emphasized that investment in specialty products is crucial. The group has acquired two companies and is currently integrating them into its structure to produce die-cast steel and tool steel. Such high-tech products can even be exported to China. At the same time, Filizzola warned that excessively high energy prices remain one of the main threats to the European steel industry. Therefore, even with CBAM and other support measures, European producers struggle to compete in the global market.
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