【Ferro-alloys.com】：The coming year may be more successful for the Hungarian steel market than 2025.

Hungary is weathering the pan-European economic crisis much more severely than other EU members. Since 2022, the country has not received any money from European budget funds due to the official position of Budapest on a number of domestic political issues. While in Italy, Poland, and Romania, steel demand is significantly supported by EU funding for infrastructure projects, Hungary is deprived of this opportunity. The resumption of European funding remains unrealized potential for the expansion of the Hungarian steel market.

Hopes for improved steel sales in 2026 are linked to the restoration of funding for development programs by Viktor Orbán’s government and foreign investment in industry. The example of Hungary shows that the state can stimulate steel consumption even without direct budgetary expenditure, by attracting private investment into the economy.

Market profile

The country’s only steel mill, Dunaferr, a manufacturer of flat-rolled products with an annual capacity of 2 million tonnes, has been in a critical situation for many years. Its current owner, the British Liberty Steel Group, is unable to get the plant fully operational due to its own financial problems.

In 2022, steel production at Dunaferr amounted to 0.9 million tons, in 2023 – 0.5 million tons, and in 2024 – 0.2 million tons. In 2025, production was halted, and in June-July, the administration laid off 1,700 workers from the rolling mills and 800 workers from the steelmaking shops.

Steel demand in Hungary is almost entirely met by imports. Its volume can be used to estimate market capacity, since in 2022-2024, about 30-40% of Dunaferr’s production was shipped under export contracts, mainly to Germany, according to information from Hungarian steel traders.

Steel sales have now returned to 2018 levels, following a surge in 2021–2022 when the government heavily financed anti-crisis economic programs using European budget funds.

Demand for flat-rolled products
The Hungarian automotive industry, the main driver of demand for flat-rolled products, consists primarily of the Audi plant in Gy?r, Mercedes-Benz in Kecskemét, Suzuki in Esztergom, and the Ikarus bus factory in Székesfehérvár.

In 2023, the industry managed to come close to the record set in 2016. The surge was short-lived, with negative dynamics returning in 2024.

Complete data for 2025 is not yet publicly available. According to the Hungarian Central Statistical Office (HCSO), production in the automotive industry fell by 4.5% in January-November. This means that the decline continued even though, for example, the Audi plant operated at full capacity in three shifts throughout 2025, according to data from the Hungarian Association of Automobile Manufacturers (MAGE).

The industry is strongly export-oriented, with domestic sales accounting for only 20–25% of total passenger car production. Hungary is not a wealthy country by European standards. Most households prefer to buy used cars. In 2024, new registrations of used cars increased by 10% to 909,000 units, while new cars increased by 12.9% – to 121,610 units.

Domestic factors are not decisive for the Hungarian automotive industry, and therefore for the demand for sheet steel. In 2025, new car registrations increased by 6.44% to 129,440 units. This did not help the industry overcome the decline caused by the economic situation in Germany, Italy, Romania, France, the US, and the UK, which are the main destinations for Hungarian car exports.

Demand for long products

The Hungarian construction industry, the main consumer of long products, is in a difficult situation. In 2023, production volumes fell by 5.4%, and in 2024 by another 0.4%. This is due to the aforementioned lack of European budget support for infrastructure projects. Building construction declined by only 0.5%, while bridge and road construction fell by 17.1%. Financing difficulties led to a 15.7% increase in the volume of unfulfilled contracts in the construction industry by the end of 2024.

Housing construction cannot compensate for the decline due to the low purchasing power of Hungarian households. If even buying a new car is an unaffordable luxury for many, then what can be said about new housing?

The industry entered 2025 with a very poor track record. By the end of December 2024, the volume of new contracts for the construction of buildings had decreased by 5.2%, and for the construction of infrastructure facilities by 15.1%. This is despite the government’s efforts to revive the market: the portfolio of construction orders in the public sector increased by 24.9%.

In January-September, the number of apartment buildings commissioned decreased by 14% to 7,490 units. In January-October, construction volumes in the industry increased by 2.5%, according to HCSO data. This indicates an improvement in the construction of industrial and infrastructure facilities, which supported demand for long products.

Outlook for 2026

It does not appear that Budapest and Brussels will be able to resolve their differences in the near future, which means that an infrastructure boom triggered by the resumption of European funding is not expected. There will also be no surge in demand for long-term loans.

However, it is important to note the government’s efforts to attract investment from large foreign companies to set up production facilities in Hungary. All these projects are related to industrial construction, as they are exclusively greenfield projects. Among other industries, the automotive industry stands out.

In early October 2025, German automotive group BMW AG opened its new plant in Debrecen with a capacity of up to 150,000 cars per year. The investment amounted to approximately €2 billion.

In May 2025, German automaker Mercedes-Benz Group AG completed construction of a plant in Kecskemét with a capacity of up to 350,000 cars per year. It was announced that production of the most popular A Class model would be transferred from the German plant in Rastatt to this site.

In the first quarter of 2026, Chinese carmaker BYD will complete the first phase of construction of a plant in Szeged with a capacity of 150,000 cars per year. The investment volume is €4 billion.

All these projects include a full production cycle. This means a significant increase in car production in Hungary in 2026. Also noteworthy are Audi’s plans to launch engine production in Gy?r and global carmaker Stellantis’ plans to expand Opel engine production at its plant in Szentgotthárd in 2026. These are the prerequisites for growth in flat steel consumption, but the situation is far from clear-cut.

At the end of December 2025, Audi AG announced upcoming staff cuts at its plant in Gy?r in 2026. This indicates plans to reduce car production.

In July 2025, BYD decided to transfer a significant amount of productionfrom Szeged to its new plant in Manisa, Turkey. As a result, the utilization rate of BYD’s Hungarian facilities will be just over 50% of the design capacity. For 2027, representatives of the Chinese carmaker are talking about plans for significant growth in Manisa and insignificant growth in Szeged, meaning that the Hungarian project will not be BYD’s flagship in the European market.

As part of its expansion, Ikarus Group Kft has decided to build its second plant not in Hungary, but in Azerbaijan. The plant will have an annual capacity of 600 buses and is scheduled to start operations in 2027.

The operation of new plants and the expansion of auto component production at existing ones may offset these negative effects on the industry and increase steel consumption.

New automotive projects are also driving industrial construction and demand for long rolled products. Here are just a few of them:

In 2025, Chinese battery manufacturer CATL began construction of the second phase of its plant in Debrecen. The project cost €7.4 billion. This is a much larger facility.

At the end of 2025, Chinese battery manufacturer Sunwoda began construction of a plant in Hungary. The first phase involves an investment of €245 million. Plans for further expansion to €1.5 billion have been announced.

Chinese battery separator film manufacturer Semcorp announced in June 2025 that it would build its second plant in Hungary.

South Korean company EcoPro BM is building a plant in Hungary to produce cathodes for car batteries.

In 2025, Chinese corporation Zhejiang Huashuo Technology began construction of a plant to produce parts for electric vehicles in Debrecen and announced the creation of a plant to produce auto parts in Miskolc.

In 2025, Prime Minister Viktor Orbán announced the launch of an ambitious program called “100 New Factories.” It covers industry as a whole, not just the automotive sector.

For example, in 2025, German manufacturer of equipment for the pharmaceutical and packaging industries Harro Hofliger began construction of the second phase of its plant in Debrecen. This is a relatively small project with an investment of €160 million. If Hungary manages to implement the program even with such a scale of new enterprises, it will be a very large investment with huge construction volumes.

The government’s assistance consists primarily of creating a convenient transport infrastructure for new production facilities. Thus, in 2025, Hungary’s largest project to build a 165 km double-track railway line between Szeged, Kecskemét, Csegled, and Budapest was launched. Its cost will amount to €2 billion. The project includes the construction of a multimodal transport hub in Kecskemét.

The goal is to serve the BYD car factory in Szeged and the BMW factory in Debrecen, creating convenient logistics for the delivery of finished products to Western European countries. The project will require significant volumes of rolled steel and steel products. In terms of steel demand, the “100 New Factories” program will have a multiplier effect.

The Home Start state program, launched in 2025, is also having a positive impact on the construction industry. It provides for the allocation of mortgage loans to households in the amount of up to €130,000 (in forints) at 3% per annum. Largely thanks to this instrument, the construction of apartment buildings worth €650 million began in the second quarter.

This is the highest figure in the last 10 years. In the third quarter, the figure was €520 million, and the average for 2024 was €370 million per quarter. This allows us to predict a significant improvement in construction dynamics in 2026 and an increase in demand for long-term loans.

• [Editor:Alakay]