LONDON- Steel demand growth in the European Union is expected to drop sharply this year as supply chain bottlenecks and soaring energy prices curb industrial operations, especially in the automotive sector, industry group Eurofer said on Friday.

Apparent steel demand, which measures output of steel producers plus net imports minus net exports, is forecast to rise 3.2% in 2022 after an expected rebound of 13.8% last year. Demand growth is forecast at 1.7% in 2023.

"Ongoing supply chain disruptions, skyrocketing energy and carbon prices, as well as persisting inflation, are putting the recovery of the steel sector at risk," said Axel Eggert, director general of the European Steel Association.

Those factors are set to have significant impact on demand from steel-using sectors until at least the second quarter of this year, he added.

Europe's biggest automaker, Volkswagen, posted its lowest sales figures in 10 years in 2021 and last month said that it expected supply chain conditions to remain volatile in the first half of this year. 

Eurofer released 2021 third-quarter data showing EU steel demand gained 14.3% year on year to 36 million tonnes, but growth eased from the 40.9% jump in the previous quarter.

Demand bounced back last year from weakness in 2020, when COVID-19 lockdowns caused it to slide by 10.7%.

Steel imports surged in the third quarter by 47.7%, Eurofer added.

(Reporting by Eric Onstad Editing by David Goodman) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))