Worldsteel has lowered its global steel demand growth forecast for 2026 to flat from a previous estimate of 0.3% growth, citing a downturn in China and ongoing conflicts in the Middle East.
The association also decreased its 2027 growth outlook to 1.7% from 2.2%.
In its latest Short Range Outlook, published Oct. 12, worldsteel forecast global steel demand at 1,722 million metric tons in 2026, virtually unchanged from 2025, before rising to 1,752 million mt in 2027.
“The trajectory we set out in April holds, but the anticipated recovery is proving slower and more gradual than we had expected,” said Alfonso Hidalgo De Calcerrada, chairperson of the worldsteel Economics Committee. “Almost the whole of that revision is a China story.
“Outside China, demand grows by 1.5% this year and accelerates to 4% in 2027 — precisely the rate we projected six months ago, and one rarely seen in recent times,” De Calcerrada continued. “The recovery we described in April is therefore not weaker; its momentum is being masked by the scale of China’s structural contraction and compounded by energy-market disruptions stemming from ongoing instability in the Middle East.”
China demand set to contract
Chinese steel demand is now expected to contract by 2% in 2026, a downward revision from April’s forecast, as property investment continues to decline and infrastructure spending remains in negative territory. Manufacturing demand has grown on the back of strong exports, but has not been sufficient to offset weakness elsewhere.
In 2027, the contraction is expected to narrow to 1%, with the real estate downturn forecast to decelerate while manufacturing sustains moderate growth, although trade frictions represent a significant risk.
Outside China, the picture is markedly more positive. India remains the world’s fastest-growing major steel market, with demand forecast to expand by 7.9% in 2026 to 172.4 million mt and by 8% in 2027 to 186.2 million mt, driven by infrastructure-led construction, private real estate, renewables investment, and automotive growth.
The Gulf Cooperation Council presents the starkest regional contrast. After GCC steel demand surged 17.7% in 2025, worldsteel now expects a fall of about 11% in 2026, as the ongoing Middle East conflict has deferred project awards, construction starts and financing decisions. The association forecast an 11.3% rebound in 2027, contingent on the security situation resolving and the Strait of Hormuz reopening. Vietnam is another standout, with double-digit steel demand growth projected in 2026, pushing apparent steel use to about 30 million mt for the first time, supported by record residential and commercial construction activity.
Outside of China and the GCC, steel demand is forecast to grow 1% in 2026 and 2.2% in 2027. EU apparent steel use is expected to decline 0.3% this year before recovering 3.1% in 2027, partly reflecting stock-building ahead of the Carbon Border Adjustment Mechanism taking effect in 2026. US steel demand is projected to grow 2% in 2026, driven by data center investment and energy infrastructure, with about 1.5% growth expected in 2027. Japan and South Korea are both set for modest recoveries, with neither market returning to pre-downturn volumes within the forecast horizon.
Author: Annalisa Villa
