Slower than anticipated GDP growth, persistent oversupply and geopolitical disruption — particularly linked to the Middle East — are reshaping steel markets, shifting competitive advantages away from pure cost efficiency toward security of supply, domestic capacity and market accessibility, Alexander Gordienko, export director of Celsa Group said during his presentation.
Global steel output and long steel demand: uneven recovery across regions
The global economic backdrop remains fragile. According to the April 2026 update from the International Monetary Fund, global GDP growth expectations for 2026 were revised down to 3.1% from 3.3% projected in January and this is assuming that the military conflict in the Middle East ends by mid year.
This growth is, however, insufficient to drive a strong recovery in steel consumption.
The World Steel Association expects global steel demand to rise by just 0.3% in 2026 — a mild recovery from a low base rather than a rebound.
Steel demand is uneven across regions. The strongest growth momentum continues to come from India, where it is expected to grow 7.4% in 2026. Africa is projected to add 3.8% to its demand; The US, Canada and Mexico, 2.1%; and Europe, combined with the United Kingdom and ASEAM countries, are to add 1.3%.
Meanwhile, in the Middle East steel consumption is expected to drop by 7.4% in 2026 amid unfavorable geopolitical situation.
Construction trends largely explain these patterns
In Europe, residential construction remains weak, while infrastructure and public spending provide limited support.
According to Gordienko, housing remains the key upside potential, with the European Commission estimating that around 2 million homes per year are needed to meet demand — although it remains unclear whether governments can unlock these projects, and bureaucracy is the major bottleneck for their realization.
The US construction market shows a similar picture, with residential activity subdued and steel demand supported mainly by selective infrastructure, power and data center projects rather than broad based construction growth.
China remains the central drag on global steel demand. There has been no meaningful recovery in real estate: in the first quarter of 2026, residential floor space sold fell by 13.1% year on year, while commercial floor space dropped by 10.4%. Domestic demand remains insufficient to absorb production, keeping export pressures elevated.
India stands out as the strongest demand market, with continued infrastructure investment and spending for 2026 2027 raised by 11.4%.
In such conditions, the Celsa Group predicts global long steel demand to remain resilient but stagnant in 2026.
According to the estimates provided by Gordienko, Europe will remain steady at 31 million tonnes and North America will improve to 12 million tonnes from 11 million tonnes. Asian rebar consumption is to decline to 268 million tonnes from 272 million tonnes, largely because of China, while the Commonwealth of Independent States is to fall to 12 million tonnes from 13 million tonnes.
On the supply side, global steel production reached around 1.85 billion tonnes in 2025, which is equal to pre-pandemic level, with production geography continuing to shift in early 2026.
India remains the clear production leader, with output up 10.8% year on year to 44.7% in the first quarter of 2026. Germany rebounded by around 9% to 9.3 million tonnes from a low base of 2025, whereas the US and Turkey recorded gains of 5.7% to 21 million tonnes and 5.3% to 9.7 million tonnes, respectively.
By contrast, Chinese output fell 4.6% in the same period to 247.6 million tonnes. Brazil declined by 3.1% to 8.1 million tonnes and Russia dropped by 10% to 15.8 million tonnes. Iran also exited the list of the world’s top ten producers, while Vietnam entered it for the first time having increased production by 10% to 6.4 million tonnes, which is a notable structural shift, Gordienko stressed.
Security, national capacity and social stability reshape steel priorities
Beyond short term demand trends, a more structural shift is underway. Governments are increasingly prioritizing security, defense, energy independence and social stability over pure cost optimization — a change accelerated by geopolitical tensions such as the US Iran conflict.
“For many years, the global economy rewarded efficiency above everything else. The logic was simple. Buy the cheapest, keep supply chains lean. The US-Iran conflict and what happened after the conflict will change the logic. Governments stop behaving like cost optimizers. They start thinking in terms of national security and national capacity. That changed the vision,” Gordienko said.
“If a country wants strong defense capability, it needs factories, logistics, ports, rail, storage, shipbuilding, and industrial depths. All of that is steel intensive. If a country wants social stability, housing becomes part of the story. Energy independence needs not only fuel, but also power generation, transmission, drilling, substations, storage, interconnections, and backup capacity. All of that, again, is very steel dependence,” he explained.
As a result, steel is becoming less of a purely global commodity and more of a locally strategic material, Gordienko added.
Market access emerges as the decisive competitive factor
In the current evolving environment, market accessibility has become one of the key determinants of competitiveness in steel — alongside, and sometimes ahead of, production cost, according to Gordienko.
“For many years, the market mostly compared means by cost of production at that is no longer enough. A mill may have cheap power, cheap labor and raw materials, but if it tries to sell to the market with quota, carbon tax, certification requirements, then the theoretical cost advantage suddenly becomes less relevant,” he said.
This shift marks a fundamental change in the market. Buyers are less willing to optimize purely for price when supply chains are fragile and delivery risks are elevated. As a result, reliable access to markets — physical, regulatory and financial — is becoming as important as cost efficiency itself.
Over the coming years, this trend is likely to define the global steel market, reinforcing regionalization and elevating the strategic importance of steelmaking capacity within national and regional boundaries, according to Gordienko.
