World Steel Association: Expected global steel demand of 1,722 billion tons in 2026 is basically the same as in 2025
The Zhitong Finance App learned that on October 12, the World Steel Association released the 2026-2027 short-term steel demand forecast report. The report predicts that global steel demand in 2026 will be basically the same as 2025, at 1,722 billion tons, and will recover 1.7% to 1,752 billion tons in 2027. China's steel demand is expected to fall 2.0% in 2026, down from the April forecast. Steel demand in developing economies (excluding China) is expected to grow by 1.9% in 2026 and will continue to grow by 5.1% in 2027.
Commenting on the forecast report, Alfonso Hidalgo de Calcerrada, chairman of the Market Research Committee of the World Steel Association and chief economist of the Spanish Steel Industry Association, said, “The trend judgment we proposed in April is still valid, but in fact, the recovery process is slower and more gradual than we expected. Global steel demand is currently forecast to remain flat in 2026, rather than growing moderately, and will grow by 1.7% in 2027, rather than the 2.2% previously forecast. This reduction is almost entirely due to changes in the situation in China. Demand outside of China increased by 1.5% this year and will accelerate by 4.0% in 2027 — this growth rate is not only in line with our forecast six months ago, but has also reached a rare high level of growth in recent years. As a result, the recovery we expected in April did not weaken, but its momentum was overshadowed by the scale of China's structural contraction and further amplified by energy market disturbances caused by ongoing turmoil in the Middle East.
One of the most important messages conveyed by this forecast is a confirmation of the expectation that industrial activity and steel demand in developed countries will improve substantially in 2027. After stabilizing from 2025-2026, industrial activity in developed countries is expected to recover broadly in 2027, supported by increased investment related to artificial intelligence, defense and energy transition spending, improved residents' incomes, and a supportive policy environment. As developed and developing economies (excluding China) grow at the same time, steel demand outside of China is expected to grow at 4.0% in 2027. Such large and widespread growth has been rare in recent years, which is a positive sign for the steel industry and the economy as a whole.
This short-term steel demand forecast is based on data available as of early September 2026. In April of this year, we had assumed that the Middle East conflict would be resolved by June, and warned that the long-term conflict would lead to a sharp reduction in the forecast. The conflict has yet to subside, but its initial impact on global economic activity was less than we had assumed. The energy market's ability to absorb supply disruptions is better than feared, and major economies have shown greater resilience than we had previously anticipated in the downturn scenario. However, this resilience should not be misinterpreted as a market immune to conflict. The economic losses in the regions most directly affected, particularly the Gulf region, are undeniable. Although the global economy has absorbed the initial shocks, its ability to cushion subsequent disruptions appears to be weakening. Based on this, we remain moderately cautious about our outlook for 2027.”
China's steel demand is expected to fall 2.0% in 2026, down from the April forecast. The downward trend in real estate investment has not slowed as we expected. At the same time, we originally expected infrastructure investment to provide support this year; in fact, it is still in a negative growth range. Although manufacturing steel demand continues to grow, driven by strong exports, the increase was insufficient to offset the impact of lower than expected real estate and infrastructure performance.
For 2027, we expect China's demand contraction to slow to 1.0%. It is expected that the downtrend in the real estate industry will begin to slow, but overall growth will remain negative. At the same time, the Chinese government is cautious about expanding infrastructure investment, and if foreign trade exports remain resilient, the manufacturing industry is expected to continue to grow moderately. However, trade frictions are gradually becoming a risk factor that cannot be ignored.
Steel demand in developing economies (excluding China) is expected to grow by 1.9% in 2026 and will continue to grow by 5.1% in 2027. Compared with the average annual growth rate of about 5% in recent years, the decline in growth this year is mainly due to the drag of the Middle East region, and regional conflicts have reversed the region's previous leading global growth trend. The internal growth momentum of other developing countries remains steady, and it is expected that the rebound in 2027 will be mainly driven by continued growth in Asian developing countries and the recovery of the Middle East region.
India is still the fastest-growing major steel market in the world. Demand is expected to grow 7.9% to 172.4 million tons in 2026, and will continue to grow 8.0% to 186.2 million tons in 2027. India's growth sources have blossomed. The infrastructure-led construction industry is still the primary driving force. Demand for private real estate is strong, while steady growth in the manufacturing industry, sufficient reserves for renewable energy projects, and continued expansion of manufacturing capacity are driving steel for mechanical and electrical equipment. Automobile production is benefiting from domestic demand, export momentum, and policy support.
The cost of this conflict is most intuitively reflected in the Gulf region. Benefiting from economic diversification plans, sufficient project reserves, and intense housing construction in Saudi Arabia and the UAE, GCC steel demand increased 17.7% in 2025. We expect GCC steel demand to drop by about 11% in 2026, a clear reversal from the trend announced in April. What we have observed is not that demand has disappeared, but that demand has been delayed: while the security situation is still unclear, project awards, construction commencement, and financing decisions have all been delayed. Judging from this, once uncertainty is removed, the Strait of Hormuz reopens, and the supply chain returns to normal, steel demand in the Gulf region will rebound strongly. Based on this optimistic scenario, we forecast an 11.3% rebound in steel demand in 2027, bringing the region's demand back to 2025 levels.
We currently forecast that the five ASEAN countries' steel demand will grow by 5.2% in 2026 and fall back to 3.2% in 2027. Vietnam is the most outstanding performer: production and trade data show that the country will achieve double-digit growth this year, and apparent steel consumption will reach about 30 million tons for the first time. This increase is mainly due to the record scale of residential and commercial construction projects under construction, as well as strong public investment plans.
Steel demand in advanced economies is expected to grow by 1.0% and 2.2% in 2026 and 2027, respectively, after stabilizing in 2025. However, the strength of the recovery should be viewed rationally. The scale of demand in 2025 is still about 60 million tons, or 15%, lower than in 2017-2018, and our predicted 2026-2027 growth will only make up for about 10 million tons, so a complete return to pre-crisis levels is still a long-term process.
We now expect the EU's apparent steel consumption to fall by 0.3% in 2026 and increase by 3.1% in 2027. The forecast for 2026 is 1.5 percentage points lower than in April. The actual performance in 2025 was better than our forecast, but much of this strong growth is due to companies making early stock reserves in response to the entry into force of the CBAM (Carbon Border Regulation Mechanism) in 2026. The fundamentals are also disappointing. The recovery of the construction industry is slower than expected and is more fragmented. Approvals for residential construction projects are showing signs of bottoming out, but completion volumes are still in decline, and the automotive industry continues to drag down demand. However, market sentiment is improving. We expect that the steel industry will experience a substantial recovery from 2027, based on improvements in infrastructure and defense spending, residents' actual income, and civil engineering activities related to energy and railway investment under the new fiscal framework.
Demand for steel in the US is expected to increase by 2.0% in 2026. The increase is mainly due to large investments in data centers and energy infrastructure (including power generation, renewable energy, oil and gas), and driven by increases in some manufacturing sectors. Apparent demand is expected to increase by about 1.5% in 2027. It is expected that the US economy will continue to grow at a rate close to the trend level. The growth in steel demand will still be concentrated on non-residential buildings, focusing on large-scale infrastructure, energy, and some terminal manufacturing projects, while residential construction performance is still weak. Residential construction activity is expected to remain relatively weak in 2027. Mortgage interest rates are high, affordability of buying homes is limited, construction costs remain high, and homebuilders' confidence is still sluggish.
Japan and South Korea will both experience a moderate recovery after a sluggish year. Japan's steel demand is expected to grow by 0.9% in 2026 and continue to grow by 1.7% in 2027. The construction industry will shift from drag to positive contribution, corporate capital expenditure expansion will drive mechanical steel, and the automotive industry will remain under pressure. After falling sharply in 2025, South Korea's steel demand is expected to grow by 1.8% and 1.3% in 2026 and 2027, respectively. The construction industry is expected to bottom out and recover slightly in the second half of 2026, while automobile production and shipbuilding activities will resume slight growth. In both countries, demand is recovering substantially but weakly, and neither will be able to return to pre-downside levels within the forecast period.
