Steel consumption in the Czech Republic: in search of new drivers

The Czech Republic is way ahead of other EU countries in terms of steel consumption per capita. According to World Steel, in 2024, this figure was 532.3 kg, compared to 388.5 kg in Italy and 312.7 kg in Germany. In absolute terms, the market capacity is small, at 5.6 million tons. Over the past five years, it has declined by a third, despite positive production dynamics in the main industries that drive demand for steel, namely automotive and construction. They cannot maintain steel sales at pre-crisis levels, so new growth points are needed.

Market profile

The Czech steel industry is concentrated in two centers: Ostrava and Trinec. The Ostrava steelworks, the country’s largest rolled steel producer with an annual capacity of 4 million tons, changed owners in July 2025. The new management faced a difficult task: to pull the company out of the abyss into which it had fallen under the management of the British Liberty Steel Group in 2020–2024.

This is largely why steel production in the Czech Republic has almost halved over the past five years, while the share of imports in the steel consumption balance has increased.

The second largest steel producer, Třinecke zelezarny, which manufactures long products, and the Vitkovice Steel Jindal steelworks in Ostrava, which specializes in thick plate, are facing certain problems. These problems are not related to a lack of domestic demand from major consumers in the construction and automotive industries, despite the market contraction in recent years.

The demand situation

The Czech automotive industry has recovered from the effects of the COVID crisis and has confidently regained its lost positions. Against the backdrop of a downturn in the European industry, Czech car manufacturers are showing strong momentum. As in other Eastern European countries, domestic demand for new cars is of secondary importance to local manufacturers due to their export orientation. Sales in the Czech Republic account for approximately 15-20% of total car production.

It is worth noting a 16.1% reduction in production in 2025, to 276,000 units, at the Hyundai car plant in Nošovice and a 1.9% reduction, to 207,000 units, at the Toyota plant in Kolín. Thanks to Skoda Auto, part of the Volkswagen AG group, the Czech automotive industry ended last year with record results, supporting demand for sheet steel.

This was further supported by a 27% increase in bus production in January-November, to 5,075 units. The Iveco CR plant in Vysoké Mýto accounted for the largest share of the volume (4,640 units), with an increase of 27.7%. This plant also manufactures components for further assembly at the Italian Iveco plant in Foggia.

The Czech construction industry returned to its previous levels in 2025 after a decline in 2023–2024, but the situation here is also ambiguous. According to estimates by the consulting company CBRE, investments in commercial real estate construction amounted to almost €4 billion.

“Never before has so much money been invested in Czech offices, shopping centers, or warehouses,” said Claire Sheils, CEO of CBRE in the Czech Republic.

Last year, developers commissioned less than 27,000 m² of new space, which is a modern minimum. Record investments by investors did not affect the dynamics in the sector.

There is a negative trend in residential construction. In January-June 2025, only 16,295 apartments were started in the Czech Republic, the lowest number since 2017. As of July 1, housing completions increased by 40% to 3,775 apartments. The completion of old projects has accelerated, but there is no basis for increasing volumes in the near future. The high figures are due to the low comparative base of 2024.

A similar situation was observed in the second half of the year. In October, the number of projects started increased by 34.5%, and those completed by 58.1%. The industry was brought into the black by infrastructure projects financed from the national and European budgets. The growth in construction and automotive production did not lead to an increase in overall steel consumption in 2025.

This was due to the situation in other sectors of Czech engineering, primarily in power engineering and the defense industry. According to the German Engineering Federation (VDMA), this is indicated by a reduction in the number of people employed in the industry from 126,000 in 2022 to 123,000 in 2025.

The decline in sheet steel consumption in 2022–2025 was also negatively affected by the curtailment of pipe production at the Liberty Steel plant in Ostrava.

Outlook for 2026

According to Martin Jan, president of the Czech Automotive Industry Association, car production in the Czech Republic reached its maximum level in 2025 given the existing production capacity. In his opinion, this figure may increase by several tens of thousands of units in 2026, but no more.

This forecast is linked to Toyota Motors’ plans to start production of its first European electric car at its plant in Kolín. To this end, the Japanese corporation is investing €680 million in expanding the plant, which will increase its area from 152,000 to 173,000 m².

The construction industry is also likely to be able to increase production volumes. According to Igor Forberger, CEO of Xella for the Czech Republic and Slovakia, residential construction volumes in 2026 will be roughly at last year’s level.

“No radical changes are to be expected in the coming year,” he stressed.

Mortgage rates remain too high, at over 4%. The Czech National Bank has tightened its requirements for issuing mortgage loans. The changes will take effect on April 1.

CBRE forecasts that the volume of commercial space commissioned in 2026 will grow to 30,700 m². This is a slight improvement, while the completion of a number of large projects already underway is expected after 2027.

There is significantly greater potential in the industrial construction segment. In the third quarter of 2025, 130,800 m² of new space was commissioned. According to the consulting company Colliers, their total volume reached 12.9 million m². At the end of the year, 2.8 million m² of new industrial facilities were in the final stage of obtaining building permits, and another 2.6 million m² were in the process of approval.

There are prerequisites for an increase in construction and car production this year. Steel sales may grow if the new owners, SPV NH Ostrava and SPV NH Koksovna, are able to resume pipe production at the Ostrava plant. This is not easy to do, as it requires significant financial investment.

In 2020–2024, the government allocated approximately €400 million to the company. This did not help to avoid bankruptcy and the shutdown of production. Now the Czech authorities have a certain and quite understandable skepticism about new expenditures for this project.

The Třinecke zelezarny steelworks has not yet received €1.7 billion in government funding for its decarbonization program, as promised in a previously signed memorandum. As a result, it has been forced to suspend its “green” projects.

The new owners of the Ostrava plant will probably have to rely solely on their own resources. The increase in pipe production in the Czech Republic is in question, as is the expansion of the steel market in 2026.

In a number of countries, including neighboring Poland and Germany, the development of wind energy provides significant support for steel demand. In the Czech Republic, there are no such prospects due to natural and climatic features. Most of the territory is forested and mountainous. As of the end of 2025, the capacity of Czech wind farms was only 0.356 GW. As part of the green transition, the government plans to develop solar and nuclear energy.

Solar power plants are not steel-intensive facilities, unlike nuclear power plants, which can increase demand for steel. Preparations are currently underway for the construction of two new reactors at the Dukovany nuclear power plant, each with a capacity of over 1 GW. They are expected to be commissioned in the second half of the 2030s. This will not affect current steel consumption.

Improvements in the performance of machine-building enterprises and/or a construction boom could restore demand for steel in the Czech Republic to pre-crisis levels, but there are currently no prerequisites for this. Steel sales in 2026 are likely to remain within the range of 5.5–5.6 million tons.