No Improvement Seen in Steel Demand Forecast

Global steel demand will remain unchanged from 2024 according to the World Steel Association, settling at about 1.75 billion metric tons for January-December 2025. Demand may improve by 1.3% to 1.77 billion metric tons in 2026, according to a new economic study conducted by the trade group’s statistical branch, World Steel Economics Committee.

World Steel issues its steel demand forecast semiannually, though it suspended its April 2025 issue due to the U.S. implementation of 25% import tariffs that month.

The principle reasons for the modest forecast is that global manufacturing activity is impaired by “elevated production costs and sustained affordability pressures on consumers,” according to World Steel’s chief economist Alfonso Hidalgo de Calcerrada.

He said an additional strain is brought by increasing tension in global trade and the resulting “direct, negative impact on steel demand in economies heavily reliant on the export of steel-intensive goods, such as machinery and automotive components.”

Continuing geopolitical uncertainties are a further deterrent to steel demand, affecting consumer and investor confidence and thereby reducing steel demand in critical market sectors.

The World Steel Assn. represents steelmakers in 70 countries who produce about 98% of all steel produced.

Several factors identified for suppressing steel demand have also been cited in the steady decreases in steel production over the past three years. For the current year, January-August 2025, global steel production is down by -1.7% versus 2024.

The new factor shaping steel demand and production are the U.S. tariffs on steel imports, increased from 25% to 50% in early June.

The situation is most acute in China, which is the world’s largest steelmaking nation and the top exporter of semi-finished steel products. World Steel products that Chinese steel demand will continue to decline, falling -2.0% for 2025.

“This forecast represents a moderation of the downward trend observed since 2021, driven primarily by the ongoing downturn in the housing market,” according to the Outlook report. “Looking ahead to 2026, the decline is projected to further decelerate to 1.0% as the housing market bottoms out.”

The report offers a more optimistic view of growth in developing countries other than China (notably India, ASEAN and MENA regions), setting a target rate of 3.4% in 2025 and 4.7% in 2026.

India is seen as having particular potential for growing steel demand, with an estimated 9% growth through 2026.

Growth in demand is also forecast for Africa and Central and South America.

Steel demand in the developed markets will post a -0.5% decreases this year versus 2024, the fourth consecutive year for falling consumption. “However, a recovery is anticipated in 2026, with projected growth of 1.5% as steel demand in the EU and U.S. is expected to bottom out in 2025 and post modest growth thereafter. Conversely, steel demand in Japan and Korea is projected to remain subdued throughout 2026.

More specifically, for the U.S. market the report forecasts steel demand will rebound by 1.8% in 2025 “thanks to front-loading of production ahead of increased tariffs and continued growth in infrastructure spending. In 2026, we expect steel demand to grow by 1.8%, aided by pent-up demand in residential construction and private investment, easing financing conditions, and reduced uncertainty.”

The rise in U.S. steel demand could be higher, according to World Steel, pending the start of federal infrastructure spending linked to the Big Beautiful Bill stimulus’ effects.