LONDON, Oct 26 (Reuters) - Steel demand in the European Union is expected to erode by 3.5% this year and fall 1.9% in 2023, hit by soaring energy prices and a looming recession, industry group Eurofer said on Wednesday.

This is the second time this year the European Steel Association has downgraded its forecast for apparent steel demand, which measures output of steel producers plus net imports minus net exports.

In February, the group said expected steel demand to rise by 3.2% in 2022, but that was revised in August to a 1.7% decline in demand.

"All downside factors have remained in place and even exacerbated, especially skyrocketing energy prices, which lead to unbearable production costs," said Eurofer Director General Axel Eggert.

The year started positively, with steel demand rising 6.1% in the first quarter to 38.6 million tonnes, but it went negative in the next quarter, dropping 4.8% largely due to the impact of soaring energy prices after Russia's invasion of Ukraine, the group said.

"Even more worrying is the persistent high level of distortive steel imports into the EU in such a context," Eggert said.

Steel imports to the EU surged 28.5% in the first quarter and rose 1.6% in the second, a statement said.