German defense industry needs more domestic armor steel

German defense manufacturers, including Rheinmetall AG, are calling on national steel companies to increase production of military-grade steel. Demand for armor steel is growing amid the war in Ukraine and the possible reduction of US military support for Europe. This is reported by Bloomberg.

Currently, Germany’s defense industry is largely dependent on Swedish supplier SSAB AB. This creates risks in the event of disruptions, especially when demand is growing. In response, two German companies, Salzgitter AG and Dillinger Hüttenwerke, have already announced their readiness to work with the defense sector. Dillinger, certified for military supplies since 2021, is in talks with armored vehicle manufacturers in Germany and Europe.

Salzgitter, one of Europe’s largest steel mills, is just preparing for its first deliveries to the defense sector. The company has already created a special division for this area.

“In the current situation, it makes no sense to rely on imports,” said Thomas Mellmann, head of Salzgitter’s defense division.

Demand is growing rapidly: Rheinmetall needs thousands of tons of military steel every year — twice as much as two years ago. The company has already started purchasing within Germany, although it does not disclose its suppliers.

Despite the increase in Germany’s defense budget — more than €60 billion in 2025 — most steel producers remain cautious. They believe that demand is still insufficient to justify the high costs of certification and re-equipment. In particular, Thyssenkrupp has stated that it does not plan to restart its thick plate mill, which was closed in 2021 for economic reasons.

Most military-grade steel producers in Germany are relatively small and vulnerable to periods of weak demand. In this regard, the German Defense Industry Federation emphasizes that state participation and guarantees are needed to ensure a stable supply of armor steel to the army.

As GMK Center reported earlier, Germany is among the world’s top ten steel producers according to World Steel. At the end of 2024, the country increased its steel production by 5.2% compared to 2023, to 37.23 million tons. Pig iron production for the year amounted to 24.33 million tons (+2.9% y/y), and hot-rolled steel production amounted to 31.61 million tons (+3% y/y).

Despite the growth in steel production, smelting volumes remained below the 40 million tonne mark for the third consecutive year, which corresponds to the level of recession, WVStahl notes.