ArcelorMittal's Asturias steel projects stalled as European auto slump dampens demand

The European steel lobby Eurofer now expects steel demand in the region to remain essentially flat through 2026, citing the ongoing weakness of the automobile sector, which has seen production fall sharply across Europe. The slowdown in auto output reduces orders for the sector’s biggest steel consumer and limits prospects for a rebound even after the EU’s new steel tariff regime takes effect in July.

In Asturias, Spain, ArcelorMittal has accelerated repairs on the high‑temperature “B” blast furnace at its Gijón plant to restore full capacity by July and is set to start operating a new 213‑million‑euro hybrid electric‑arc furnace later this year. However, the company has not yet approved an electric‑arc furnace for its Avilés works, a project required to produce low‑carbon “green” steel sheet. Without that approval, the Asturian site will continue to rely on two coal‑fired blast furnaces and will lack the ability to manufacture flat‑rolled green steel, risking the loss of up to 5,000 direct jobs as rivals in France (Dunkerque) and the Basque Country expand their green‑steel capacity.

The steel sector’s outlook is further clouded by broader economic uncertainty, high energy costs and geopolitical tensions, which together keep investment and industrial activity subdued.