The global steel market in 2026 is expected to move into a phase of cautious recovery after a period of uneven growth and volatility. Demand is projected to rise modestly, supported by infrastructure development, manufacturing recovery in select regions, and government-backed capital spending. While China continues to dominate the global steel landscape, its role is gradually shifting from volume-led growth to output discipline and export management. At the same time, India and other emerging economies are becoming the primary growth engines.
Raw material prices such as iron ore, coking coal, and scrap will remain critical in shaping steel prices and mill margins. Alongside market fundamentals, structural changes such as decarbonisation, electric arc furnace expansion, and trade policy adjustments will strongly influence steel flows and investment decisions. The steel market in 2026 will therefore be defined less by rapid expansion and more by regional divergence, cost discipline, and long-term strategic positioning.
Global Steel Demand Outlook
Global steel demand in 2026 is forecast to increase by approximately 1.3 percent, reaching around 1.77 billion tonnes. This growth follows a relatively flat 2025, where weak construction activity in China and slower global manufacturing offset gains in emerging markets. The expected recovery in 2026 is moderate rather than aggressive, reflecting ongoing macroeconomic uncertainties and tighter financial conditions in many economies.
Demand growth outside China is expected to outperform the global average. Emerging markets in South Asia, Southeast Asia, the Middle East, and parts of Africa will account for most of the incremental consumption. Infrastructure investment, energy projects, urban development, and industrial capacity additions are the main drivers in these regions. In contrast, demand growth in developed economies such as Europe, Japan, and parts of North America is expected to remain modest, constrained by slower industrial expansion and structural shifts toward service-based economies.
China’s Role in the 2026 Steel Market
China remains the single most important factor influencing the global steel market, even as its domestic demand growth continues to slow. Chinese crude steel production declined in 2025, with monthly output falling to multi-year lows toward the end of the year. Total annual production for 2025 is estimated to be well below the peaks seen earlier in the decade.
In 2026, China is expected to maintain strict control over steel output, driven by environmental targets, margin protection, and efforts to rebalance its economy away from property-led growth. Domestic steel consumption is unlikely to return to earlier highs, as the real estate sector continues to adjust and infrastructure investment becomes more selective.
Despite lower steel production, China’s iron ore imports remained strong through 2025, supported by restocking and relatively stable ore prices. This disconnect between steel output and raw material demand highlights the importance of inventory cycles and mill behaviour. In 2026, Chinese mills are expected to remain cautious, focusing on profitability rather than volume expansion.
A major development shaping 2026 is China’s implementation of an export licence system covering a wide range of steel products. While the policy is officially aimed at improving monitoring and transparency, it may slow export procedures and increase administrative complexity. Even small disruptions in Chinese exports can have significant effects on global prices and regional supply balances.
India as the Key Growth Engine
India is set to be the fastest-growing major steel market in 2026. Steel demand growth is expected to remain in the high single-digit to low double-digit range, far exceeding the global average. This growth is supported by large-scale infrastructure spending, continued urbanisation, expansion of manufacturing capacity, and government initiatives aimed at boosting domestic production.
Roads, railways, ports, renewable energy, housing, and industrial corridors are driving strong demand for long products such as rebar and structural steel. At the same time, growth in automotive manufacturing, appliances, and capital goods is supporting flat steel consumption.
India’s rising demand also makes it a key destination for regional steel trade, although domestic capacity additions aim to reduce import dependence over time. In 2026, India will play an increasingly important role in balancing global steel supply and demand.
Regional Demand Trends Outside China
Southeast Asia is expected to see steady steel demand growth in 2026, supported by construction, industrial development, and foreign direct investment. Countries such as Vietnam, Indonesia, and the Philippines continue to invest in infrastructure and manufacturing, providing consistent demand for both long and flat products.
The Middle East is another important growth region, driven by energy-related projects, diversification initiatives, and large-scale construction. Steel demand in Gulf countries is supported by investments in renewables, petrochemicals, and transport infrastructure.
Africa’s steel demand remains relatively small in absolute terms but is growing steadily, particularly in North and East Africa. Urbanisation and infrastructure development are key drivers, although financing constraints remain a challenge.
In contrast, Europe’s steel demand outlook for 2026 remains subdued. While some recovery is expected in industrial sectors, high energy costs, regulatory pressures, and slow economic growth limit upside potential. North America is expected to see stable but unspectacular growth, with infrastructure spending providing support while manufacturing demand remains mixed.
Steel Prices and Market Trends
Steel prices entered late 2025 on a firmer footing compared to mid-year lows. Hot-rolled coil prices in major markets recovered, reflecting better demand sentiment and supply discipline. In the United States, benchmark hot-rolled coil prices were trading close to the equivalent of 900 dollars per tonne toward the end of 2025. Prices in Europe and Asia also showed improvement, although regional differences remained significant.
In 2026, steel prices are expected to remain volatile but generally supported by modest demand growth and tighter supply management. Prices are unlikely to return to the extreme highs seen during earlier supply shocks, but sustained downside also appears limited unless global economic conditions deteriorate sharply.
Price movements will increasingly reflect regional fundamentals rather than a single global trend. Markets with strong infrastructure spending and import controls may see firmer prices, while regions exposed to excess capacity and weaker demand could face pressure.
Raw Materials Outlook
Iron ore prices remained resilient through late 2025, trading around the low to mid 100 dollar per tonne range for benchmark grades. This stability was supported by steady Chinese imports, limited supply disruptions, and expectations of gradual demand recovery outside China.
In 2026, iron ore prices are expected to remain sensitive to changes in Chinese steel output and global supply conditions. Any renewed stimulus or restocking cycle in China could push prices higher, while deeper production cuts would weigh on demand.
Coking coal prices are expected to remain volatile due to supply constraints and geopolitical risks. Scrap prices will continue to gain importance as electric arc furnace capacity expands. Regions with limited scrap availability may face higher input costs, influencing the competitiveness of EAF-based steelmaking.
Energy prices will also play a critical role, particularly for EAF producers. Electricity costs and access to low-carbon power will increasingly shape regional cost curves.
Trade Policies and Global Steel Flows
Trade policy remains a defining feature of the steel market in 2026. Many countries continue to rely on safeguards, quotas, and anti-dumping measures to protect domestic producers. These measures fragment the global market and create regional price differences.
China’s new export licence system is expected to add another layer of complexity. Even if export volumes are not directly restricted, administrative delays and compliance requirements could affect shipment timing and pricing.
Carbon-related trade measures are also gaining importance. Regions implementing carbon border adjustments are effectively favouring lower-emission steel, influencing sourcing decisions and encouraging producers to invest in cleaner technologies.
Decarbonisation and Green Steel Transition
The transition toward low-carbon steel production is accelerating and will increasingly influence market dynamics in 2026. Steel producers around the world are investing in electric arc furnaces, direct reduced iron facilities, hydrogen-based technologies, and carbon capture systems.
While green steel currently represents a small share of total output, demand from automotive manufacturers, construction firms, and consumer goods companies is growing. Buyers under pressure to reduce supply-chain emissions are increasingly willing to pay a premium for certified low-carbon steel.
In 2026, the market will begin to see clearer differentiation between conventional steel and low-emission products. This transition will not eliminate traditional production routes but will gradually reshape investment priorities and competitive advantages.
Industry Strategy and Consolidation
Steel companies are adjusting strategies to reflect slower global growth, higher capital requirements, and sustainability goals. Capacity optimisation, cost reduction, and selective expansion in high-growth regions are key themes.
Mergers, acquisitions, and joint ventures are expected to continue as companies seek scale, technology access, and geographic diversification. Producers with secure raw material supply, efficient operations, and clear decarbonisation roadmaps are likely to outperform.
Risks and Uncertainties
Several risks could affect the steel market outlook in 2026. A sharper-than-expected slowdown in China could weaken global demand and trigger export pressure. A global economic downturn would hit manufacturing and construction activity. Volatile raw material prices or energy disruptions could squeeze margins. Escalating trade tensions could further fragment markets and distort pricing.
At the same time, upside risks include stronger infrastructure spending, faster industrial recovery, and accelerated investment in energy transition projects, all of which are steel-intensive.
Conclusion
The steel market outlook for 2026 points to steady but uneven growth rather than a strong global rebound. Emerging markets, particularly India, will drive demand expansion, while China’s influence will increasingly be felt through policy and trade rather than sheer volume. Prices are expected to remain supported but volatile, shaped by regional fundamentals and raw material costs.
Decarbonisation and green steel initiatives will move from long-term vision to near-term commercial reality, creating new opportunities and challenges. For steel producers, traders, and consumers, success in 2026 will depend on adaptability, cost control, regional insight, and readiness for structural change.
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