Despite Europe’s steel industry remaining beset by demand destruction and high energy prices, recent policy measures have made the region more attractive for investment, panellists said at the Kallanish Europe Steel Markets 2026 in Vienna.
GMK Center chief executive Stanislav Zinchenko said steelmakers have a unique opportunity to use improving margins to modernise and decarbonise assets. He estimates that industry margins could double by 2027 compared with 2025 levels. Higher profitability could make capacity restarts and new investments more attractive.
However, new investments could cause a supply imbalance. Zinchenko highlighted around 14 million tonnes/year of potential additional flat steel capacity from greenfield developments. “What will Europe do with all this new capacity?” he asked.
Banks are supplying financing, but the steel sector is struggling to compete with “more sexy” sectors such as AI, noted ING Bank director Matthias Winkeler.
Policy support is increasingly key to securing finance, he noted. The greater the certainty of protective policies such as the Carbon Border Adjustment Mechanism (CBAM), the more confidence banks had that steel companies would be able to repay their loans.
There are opportunities for specific investments in certain products. Poland’s Huta Częstochowa plant has been revived by Weglokoks with investment from Poland’s Ministry of Defence, noted Adrian Sienicki, vice president of Weglokoks.
The company saw a specific opportunity in steel plate and restored a bankrupt plant. Although defence is a key target sector, it is only expected to account for 7% of sales, and 12% of margins at most.
Another 10% of volumes would be to the energy sector, while the construction and infrastructure industries would be the biggest customers.
GMH Gruppe director of sustainability and communications, Luciana Filizzola, noted that investment in specific products was key. GMH has bought two companies which it is currently integrating in order to produce die-casting and tool steel. This high-tech steel production means the company can export to China, she noted.
However, she warned that one of the key risks to Europe’s steel industry is that the energy prices are too high. This means that even with CBAM and other measures, it is very difficult for European producers to compete on international markets.
Author: Tomas Gutierrez
