A precarious Present for Europe’s Stainless Steel Industry

Europe’s stainless steel sector is confronting an unprecedented crisis, as detailed by industry leaders at the Bureau of International Recycling World Recycling Convention & Exhibition in Valencia, Spain, held May 26–28, 2025. Markus Moll, Managing Director of SMR GmbH, described the current situation as “an ugly picture,” emphasizing the continent’s drastic decline from producing nearly 40% of the world’s stainless steel 25 years ago to less than 10% today. “If upstream manufacturing disappears here, downstream processing won’t survive either,” Moll warned.

This stark decline threatens not only economic output but also the industrial sovereignty of Europe in a sector historically vital to infrastructure, automotive, and aerospace industries.

Asia’s Growing Stainless Steel Hegemony

Asia’s expanding dominance in stainless steel production is reshaping global supply chains. Moll projected a 4% increase in global crude stainless steel output for 2025, but with Europe lagging behind. He noted, “Indonesia is expected to grow by 20%, China by 3%, while Europe struggles to maintain momentum.” Highlighting the influence of mega-producer Tsingshan, which now commands 30% of global stainless steel output and 40% of austenitic grades, Moll expressed concern: “This consolidation of power is frightening, it risks marginalizing European producers and suppliers.”

He also drew attention to China’s ambition in the high-performance superalloys sector. “In the next five to ten years, China aims to take a significant lead in jet engine superalloys, which could redefine technological leadership.”

Cautious Optimism in India’s Stainless Steel Growth

Ritesh Maheshwari, CEO of Shabro Metallic Pvt. Ltd., offered a nuanced view from India. “India’s stainless steel production grew 13% to 3.7 million metric tons over the last year, yet scrap imports fell slightly by 1–2%, signaling cautious mill behavior,” he explained. “Producers are balancing growth with careful inventory management in uncertain global markets.”

Maheshwari highlighted a notable shift in the battery materials sector, explaining, “Demand for nickel-manganese-cobalt batteries has dropped by 19%, due to a growing preference for nickel-free chemistries. This change directly impacts nickel consumption in stainless steel manufacturing.”

Tariff Shocks & Inflationary Pressures Compound Challenges

Europe’s recovery prospects have been further disrupted by external forces. Maheshwari outlined the detrimental impact of recent U.S. tariffs on stainless steel imports, which have “dampened demand and distorted trade flows.” Meanwhile, mills in the Middle East grapple with surging raw material costs, disrupted supply chains, and escalating energy prices. “These inflationary factors tighten margins for producers already facing stiff global competition,” he said.

Smaller European suppliers and recyclers are especially vulnerable, facing the dual challenges of maintaining profitability and competing with large Asian conglomerates.

Recycling Gains Signal Hope Amid Adversity

Despite these headwinds, recycling remains a beacon of potential relief. Moll pointed to increased scrap ratios worldwide in 2024, except for India. “China’s improved local scrap availability is a positive development for sustainability and cost containment,” he noted. “Moreover, stainless steel stockpiles globally are at record lows, except in China, which still maintains a surplus.”

Such trends underscore the growing importance of circular economy principles in stabilizing supply chains and reducing CO₂ emissions.

Nickel’s Evolving Role Amid Energy Transition

Jianbin Meng, Director of Economics and Environment at the International Nickel Study Group, highlighted nickel’s pivotal position. “Approximately 1 million metric tons of nickel scrap were recycled into stainless steel in 2023, making it the largest nickel consumer by a wide margin,” he stated.

However, Meng emphasized shifting dynamics due to electric vehicles: “EV sales now represent 22% of global car sales, a significant acceleration beyond earlier forecasts. This drives demand for battery-grade nickel and reinforces recycling’s importance in meeting raw material needs sustainably.”

Meng urged the recycling sector to “embrace advanced technologies and leverage regulatory frameworks” to ensure it meets the expanding requirements of both stainless steel and battery manufacturers.

European Fabrication Faces a Precarious Future

Moll delivered a sobering assessment of Europe’s fabrication industry. “Products such as heat exchangers and other value-added items must remain profitable to preserve local manufacturing jobs,” he stressed. “If we fail to address these challenges, Europe’s stainless steel market could shrink by 50% within the next decade.”

He warned that unchecked import competition risks hollowing out critical industrial segments. “We need coordinated policy efforts to support recycling infrastructure, innovation, and market fairness,” Moll said. “Otherwise, the erosion of our industrial base will accelerate.”

Recycling Innovation: A Strategic Imperative

Meng concluded the session by urging the sector to innovate rapidly. “Advanced recycling technologies are essential to meet tightening environmental regulations and capitalize on incentives embedded in policies worldwide,” he said. “Recyclers must position themselves at the forefront of the clean energy transition, driving both economic and environmental benefits.”

His call to action emphasized that modernized recycling is not only an economic necessity but also a key contributor to global sustainability goals.

Key Takeaways

• Europe’s share of global stainless steel production has dropped below 10%, threatened by rapid expansion from Indonesia and China, particularly Tsingshan’s rising dominance.

• Global scrap utilization increased in 2024 across all major regions except India, highlighting recycling’s growing role in cost reduction and sustainability.

• EV sales surged to 22% of total car sales in 2024, intensifying nickel demand for batteries and stressing the need for advanced recycling technologies to support both stainless steel and energy sectors.