Uncertainty stemming from the war in Ukraine and soaring energy prices along with a slide in Chinese investment are causing cracks in the production outlook for steel.

The first half of this year saw global output of the metal slide 5.4 percent over the same period last year to a total 1.1 billion tonnes, according to the World Steel Association of 64 producer countries.

The steepest drops are in Russia and several ex-Soviet states as well as Ukraine itself, where production has plunged 18.8 percent to 50.5 million tonnes, according to World Steel data.

The steelworks of Azovstal in the Ukrainian city of Mariupol, shelled into ruins following a weeks-long siege as Russian forces sought to draw out Ukrainian troops holed up there, is symbolic of that slide in the embattled country.

ArcelorMittal, the world's number-two steelmaker, listed Ukraine as a major factor behind its second quarter profits slump and in March announced it was stopping production at its main site there in the central city of Kryvy Rih.

The European Union saw a collective production drop of 5.6 percent from January to the end of June, while Asia's falloff was 4.8 percent to 812.6 million tonnes.

The Middle East only accounted for a 25.3 million tonnes, but that was nonetheless a rise of 4.4 percent.

Quite apart from the spike in energy prices boosting, Arcelor Mittal also noted a falloff in client demand -- in particular from the automotive sector.

The firm last weekend said it would from the end of the month close blast furnaces at two of its plants -- in Bremen, northern Germany and Gijon, northern Spain.

"The high costs of gas and electricity are weighing heavily on our competitivity," explained Reiner Blaschek, head of ArcelorMittal Germany.

One of three blast furnaces the company manages in France was idled in July and another will be so for at least six weeks of maintenance.

ArcelorMittal also plans the temporary idling of two galvanizing lines in Dunkirk as well as a foundry at Fos-sur-Mer in southern France.

- China concerns -

"China, which has been for more than 20 years the growth motor of the global steel industry in infrastructure, road and factory construction has announced it is to stabilise if not reduce its steel consumption," said Marcel Genet, steel expert with Laplace Conseil.

China in fact accounted for some 90 percent of growth in steel demand over those two decades.

Analysts at Rystad Energy said demand in the United States is also falling as worries about a recession mount.

As Europe steps up its energy transition away from fossil fuels, that likewise renders the industry's position more precarious.

- Renewables, nuclear -

"Until last year all the steelmakers present in Europe -- Germany's ThyssenKrupp, India's Tata Steel or ArcelorMittal were agreed on an orderly transition of the sector," Genet tells AFP.

That would have entailed the progressive replacement of existing foundries as the industry is a major producer of carbon dioxide.

For every ton of steel produced by coal-fired foundries, almost two tonnes of carbon dioxide are emitted.

A shift to natural gas would cut the industry's CO2 production footprint by half come 2040, said Genet.

The next stage shift to using "green" hydrogen produced from renewable electricity sources, thus eliminating CO2 emissions from the process.

The European Commission has approved the plan. But the conflict in Ukraine has upset those plans as the price of natural gas has spiked tenfold.

"Today, all these development projects of European steel are on standby," said Genet, who added that "you'd have to speed up the arrival of renewable and nuclear energy" to keep European steel production afloat.

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