Global steel demand has been forecast to increase by 0.3% to 1.72 billion tonnes in 2026, followed by an ‘accelerated’ growth rate of 2.2% to 1.76 billion tonnes in 2027, according to the World Steel Association (Worldsteel) in its latest Short-Range Outlook (SRO) report published Tuesday April 14.
The report suggested that global steel demand could be bottoming out in the near-term as the industry exits a “protracted and challenging phase of global structural adjustments that has suppressed demand since 2022.”
Worldsteel attributed the anticipated reversal in demand trends to a deceleration in the rate of demand contraction in China and a “vibrant” Indian steel economy helping steel demand over the next couple of years.
The organization acknowledged, however, that the continuing conflict in the Gulf region and the consequent restrictions on commodity flows could act as a caveat to growth in the region.
Several Gulf steelmakers have been heard reducing their output volumes over the last month due to the regional conflict restricting access to seaborne raw materials including iron ore pellet and ferro-alloys, sources have told Fastmarkets.
Major steel mills in Iran have been damaged by strikes and could take up to 6-12 months to recover from the attacks, local news agencies have reported.
Chinese demand deficit to narrow
Worldsteel expects the deficit in Chinese demand to soften in 2026 to -1.5%, citing that the housing market correction may have reached its bottom and infrastructure investments are expected to increase this year.
In 2027, the association expects steel demand in China to plateau relative to expectations in 2026, which they suggest is due to the effects of a real estate industry correction largely expected to be felt in 2026.
Fastmarkets assessed the price of domestic hot-rolled coil, ex-warehouse Eastern China, at 3,280-3,300 yuan ($474-475) per tonne on Tuesday April 14, compared with 3,280-3,290 yuan on March 13, with continuing supply constraints helping to sustain price levels, sources told Fastmarkets.
Market participants said strong slab export momentum – triggered by the shortfall in Iranian supplies since the war, its wide-ranging effects across the Middle East and the subsequent closure of the Strait of Hormuz – had led to a surge in overseas orders that has diverted slab away from the domestic market, thereby lending underlying support to HRC prices.
Indian steel demand to maintain strong trajectory
India, the world’s fastest-growing major steel market, is expected to grow its steel demand by 7.4% in 2026 and 9.2% in 2027, the association said.
Growth in the infrastructure sector and in the automotive industry were cited as key demand drivers in the report, with a nationwide rail-network expansion project supporting steel demand at present.
Indian crude steel output hit 164.9 million tonnes in 2025, up by 10.4% year on year, further cementing India’s rank as the world’s second-largest producer behind China.
The momentum carried into early 2026, with output rising by another 9.7% year on year in January-February, according to data from WorldSteel.
US market expected to grow on private sector investment
The US market is expected to grow by 1.7% this year and by 2.0% in 2027, with Worldsteel suggesting that easing financing conditions and interest rates could support residential construction.
Data center investments in the US have also been supporting steel demand in the region, with US steelmakers facing a “robust opportunity” in the data center construction boom, driven by rapid implementation of artificial intelligence software, according to Barry Zekelman, executive chairman and chief executive officer of Zekelman Industries.
“However, the pace of this rebound is likely to remain constrained by persistent structural challenges, including elevated material costs, high mortgage rates, affordability pressures, and continuing labor shortages. Additionally, demand for durable goods may be tempered amid a softening labor market,” Worldsteel said.
EU, UK demand to reverse course on recently sluggish growth
Worldsteel expects infrastructure and defense spending to support the European and UK markets to grow by 1.3% in 2026 and 3.0% in 2027, in a “long-awaited” return of steel demand growth.
Demand for imports in the European steel markets has dwindled in the year so far since the introduction of steep Carbon Border Adjustment Mechanism (CBAM) costs faced by European importers in January 2026, according to trade sources.
European markets have therefore been more reliant on domestic production, with producers within the EU reporting healthier demand and in turn moving toward greater ferrous scrap demand to feed their growing output, sources said.
