The Chief Economist of the United Nations Environment and Development Ministry (UNESID) and Chair of the Worldsteel Economics Committee, Alfonso Hidalgo Calcerrada, said: “Our latest forecasts confirm the trajectory identified in our October 2025 SRO report and confirm that global steel demand reached its bottom in the 2025–2026 period. This follows a long and challenging period of global structural adjustment that has been weighing on demand since 2022.”
2026 and 2027 outlook
In 2026, we are entering a modest growth path, with a more pronounced acceleration expected for 2027. This broader recovery is driven by divergent regional dynamics. In China, the rate of demand contraction is finally slowing in 2026, while demand growth remains strong in key emerging markets, particularly India.
However, we expect the ongoing conflict in the Middle East to lead to a sharp decline in steel demand in the region in 2026, which would otherwise be expected to show strong growth.
More importantly, we expect a meaningful turnaround across the developed world. After a prolonged period of decline, all major advanced economies, including the European Union, the United States, Canada, Japan, and Korea, are expected to return to positive growth in 2027.
As a result, global steel demand excluding China is expected to reach a growth rate of 4.0% in 2027, a level rarely seen in recent times. This outlook reflects data available as of mid-March 2026, while escalating conflict in the Middle East represents a significant stress test.
Our base assumption is that a resolution will be found by June; under this timeline, we expect steel demand to remain resilient in most major economies. In particular, the US, China, and India appear largely insulated from direct impacts.
Moreover, although at high risk, the EU has strengthened its systemic energy resilience since the 2022 Russia–Ukraine crisis. The sharp difference between the 2022 natural gas price peak and current levels indicates that the impact so far has been much more limited.
However, if hostilities continue beyond the second quarter, significant downward revisions would be required, particularly for regions with high structural energy sensitivity.
Steel demand outlook in China
With the correction in the housing market approaching a bottom, we expect the contraction in steel demand in China to narrow to -1.5% in 2026. Infrastructure investment in the country is expected to rise slightly, supported by local governments’ efforts to maintain moderately strong GDP growth.
With exports continuing to expand, manufacturing sectors are expected to show moderate growth in steel demand. However, a more challenging global trade environment remains a significant downside risk that could slow manufacturing demand in the coming years.
For 2027, we expect China’s steel demand to remain broadly flat compared to 2026 levels. This outlook is based on the expectation that the long-running real estate correction will largely stabilize by 2027, easing the severe downward pressure that has dominated the sector since 2021.
As the structural restructuring of the real estate market stabilizes, China’s steel demand is expected to enter a phase of cyclical stability.
Last October, Worldsteel forecast a 2.0% contraction in China’s steel demand for 2025. The newly released official figure shows a 7.1% decline for China. Indirect indicators, however, point to a more moderate downturn.
Emerging economies
Steel demand growth in emerging economies excluding China is expected to slow to 2.5% in 2026, a significant deceleration compared to the roughly 5% annual growth seen in recent years.
This slowdown is mainly driven by a sharp contraction in the Middle East, where regional conflicts have abruptly reversed previous growth expectations.
We also expect normalization in ASEAN economies; after strong expansion in 2025, growth in this region is expected to temporarily slow as inventory-building activity fades.
However, the outlook for 2027 is stronger, with growth expected to accelerate to 5.1%. This recovery will be supported by continued momentum in emerging Asia and Africa, as well as the expected rebound in the Middle East.
Strong growth in India
India remains the world’s fastest-growing major steel market, with demand expected to grow by 7.4% in 2026 and 9.2% in 2027.
This strong outlook is based on broad-based strength across all key steel-consuming sectors. Growth is primarily driven by sustained, infrastructure-led construction activity and a growing automotive sector supported by rising freight transportation demand.
In addition, a strong capital expenditure cycle continues to support demand for capital goods, while expansion of the national railway network and growth in affordable consumer goods provide additional structural tailwinds.
Transformation in Africa
As highlighted in our previous statement, Africa has been undergoing a transformative shift since 2023, with clear signs of a strong rebound in construction activity and local steel consumption.
Our latest forecasts confirm this trajectory, projecting growth of 3.8% in 2026 and 4.6% in 2027. This sustained momentum reflects an increasing focus on large-scale urbanization, critical infrastructure development, and economic diversification efforts, positioning Africa as an increasingly important and resilient driver of the global steel market.
Overall outlook for developed economies
Steel demand in developed economies grew by 0.2% in 2025, ending three consecutive years of decline since 2021.
We expect this stabilization to pave the way for a gradual recovery, with growth reaching 1.0% in 2026 and accelerating to 2.3% in 2027.
However, it is important to view this recovery within a broader historical context. The 2025 market size remains about 60 million tonnes (15%) below levels seen in 2017–2018, indicating that a full return to pre-crisis volumes is still a long-term process.
European Union and United Kingdom
We expect demand in the EU+UK region to grow by 1.3% in 2026 and 3.0% in 2027.
The return of long-awaited growth in steel demand in the EU reflects improving macroeconomic conditions, including increased infrastructure and defense spending across the continent as well as expected improvements in real household income.
However, the region’s high sensitivity to energy price spikes remains a key downside risk for 2026.
US steel demand outlook
Steel demand in the United States is projected to grow by 1.7% in 2026 and 2.0% in 2027.
This growth is expected to be supported by continued strong, technology-driven and policy-supported private sector investment as well as public infrastructure spending.
In the residential construction sector, a healthy recovery is expected due to significant pent-up demand and gradually easing financing conditions.
However, the pace of recovery may remain constrained by persistent structural challenges such as high material costs, elevated mortgage rates, affordability pressures, and ongoing labor shortages. Additionally, demand for durable goods may soften due to weakening labor market conditions.
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