Salzgitter AG lowers sales expectations: steel industry in crisis!

Salzgitter AG lowers sales expectations: steel industry in crisis!

Salzgitter AG isn't exactly making the best headlines at the moment. The steel group has revised its sales and earnings forecast for 2025 downwards. The new, expected sales range from 9 to 9.5 billion euros - the original estimates were between 9.5 and 10 billion euros. This adjustment is not surprising given the unexpectedly weak half-year figures. External sales in the first six months of 2025 were 4.7 billion euros, which represents a decline compared to 5.2 billion euros in the previous year. Earnings before interest, taxes, depreciation and amortization (EBITDA) have also fallen and are now around 117 million euros, compared to 233 million euros in 2024. It is expected that the situation will not improve in the second half of 2025, so Salzgitter AG must continue to be prepared for weak market developments.

The decline in sales is due, among other things, to the US government's new tariff plans, which are causing unrest on the market. Salzgitter AG's profit fell from 1.1 billion euros in 2022 to just 204 million euros in 2025. In addition, the dividend will be significantly lower this year. Full details of the first half-year results will be published on August 11, but the trends are already clear. NDR reports of a worrying downward trend that the industry should monitor closely.

Difficulties in the steel industry

The situation in which Salzgitter AG finds itself reflects a larger problem: the German steel industry has been struggling with a recession for some time. Once known as the backbone of the German economy, the industry recently produced around 37 million tons of steel. However, this industry is struggling with the consequences of a changing market and geopolitical challenges. National steel consumption was about 337 kilograms per person in 2023, but production volumes fluctuate and greatly influence sales. The industry's total sales recently amounted to around 45 billion euros, which is around 37 percent of the German metal industry's total sales. Statista shows impressively how the economic situation is putting companies under pressure.

Furthermore, the future of steel production is becoming increasingly uncertain. Larger companies such as thyssenkrupp have already downsized their locations and sold business areas in order to remain competitive. In 2023/24, Thyssenkrupp recorded one of the lowest sales in twenty years at around 35 billion euros. Recent developments suggest that the industry is facing upheaval. Many steelworks have had to close in recent decades, which has had not only economic but also social consequences.

On the way to sustainability

A ray of hope could be the direction towards more sustainability. The German steel industry is working intensively on reducing emissions. Since it is responsible for around a third of the emissions of the entire German industry, the focus is on innovative processes such as the hydrogen method for producing steel. Recycling also plays an important role; Latest statistics show that around 14.9 million tons of steel scrap were used to produce new crude steel in Germany. Companies are forced to adapt in order to survive both environmentally and economically. MarketSteel reported about the challenges and positive approaches in the industry.

In conclusion, it can be said that Salzgitter AG and the entire steel industry have a rocky road ahead of them. But with a clear focus on innovation and sustainable practices, it could be possible to put the industry on a new foundation and meet the challenges that the global market situation brings with it.