Germany’s Growing Demand for Military-Grade Steel Amid Global Tensions

Rising Demand for Military-Grade Steel in Germany

Germany’s defense industry is facing a significant challenge—meeting the growing demand for military-grade steel. The war in Ukraine and shifting geopolitical dynamics, including the possible reduction of US military support for Europe, are driving this surge in demand. Companies like Rheinmetall AG are urging national steel producers to ramp up military steel production to avoid potential disruptions. Currently, Germany’s defense sector is heavily reliant on Swedish steel supplier SSAB AB, posing a risk in times of increased demand.

Germany’s Steel Industry Response

In response to these concerns, two of Germany’s largest steel producers, Salzgitter AG and Dillinger Hüttenwerke, have stepped forward. Dillinger, certified for military supply since 2021, is already in talks with armored vehicle manufacturers in both Germany and Europe. Salzgitter, one of Europe’s largest steel mills, is also preparing for its first military-grade steel deliveries and has set up a dedicated defense division. According to Thomas Mellmann, head of Salzgitter’s defense division, relying on imports in the current situation makes no sense, especially with growing national demand.

However, despite these efforts, most steelmakers remain cautious about investing in military-grade production. The certification process for such materials is costly and time-consuming. Thyssenkrupp, for instance, has no plans to restart its thick plate mill, which was shut down in 2021 due to economic concerns. This highlights the delicate balance between meeting the defense industry’s needs and managing financial risks.

Challenges Ahead for the German Defense Sector

Rheinmetall, which requires thousands of tons of military steel annually, has already started sourcing domestically, though it has not disclosed specific suppliers. Despite the German government’s substantial increase in defense spending—more than €60 billion allocated for 2025—the defense industry’s reliance on imported materials and smaller producers creates vulnerability.

The German Defense Industry Federation has highlighted the necessity for state participation and guarantees to ensure a stable supply of armor steel. Without such measures, Germany’s defense industry could struggle to maintain its readiness, particularly as the geopolitical landscape continues to evolve.

SuperMetalPrice Commentary:

The push for increased domestic production of military-grade steel in Germany reflects broader global trends where national security concerns are influencing material demand. The growing need for armor steel, driven by the ongoing conflict in Ukraine and broader defense spending increases, is reshaping the priorities of steel manufacturers. While some companies are stepping up, others remain cautious due to high certification costs and financial risks. The challenge for the German government will be to balance these concerns with the increasing urgency for a secure and stable supply of military steel. As global tensions persist, countries may increasingly turn to domestic suppliers, which could drive both investment and innovation in the military-grade steel sector.