【Ferro-alloys.com】：The World Steel Association (worldsteel) today released its Short Range Outlook (SRO) steel demand forecast for 2026 and 2027. worldsteel forecasts that global demand will grow by 0.3% in 2026 to reach 1,724 Mt, followed by an accelerated growth of 2.2% in 2027 to reach 1,762 Mt.

Commenting on the outlook, Alfonso Hidalgo Calcerrada, Chief Economist, UNESID, and Chair of the worldsteel Economics Committee, said:

“Our latest forecasts validate the trajectory established in our October 2025 SRO, confirming that global steel demand is bottoming out over the 2025-2026 period. This follows a protracted and challenging phase of global structural adjustments that has suppressed demand since 2022.

We are now transitioning to a path of modest growth in 2026, with a more pronounced acceleration projected for 2027. This broader recovery is being driven by distinct shifts in regional dynamics. In China the rate of demand contraction is finally decelerating in 2026, while demand growth across key developing markets, most notably India, remains vibrant.

However, we expect the ongoing conflict in the Middle East to result in a sharp drop in that region’s steel demand for 2026, which was otherwise positioned for strong growth.

Critically, we anticipate a meaningful turnaround in the developed world as a whole. After a protracted period of decline, we expect to see all major developed economies, including the European Union, the US, Canada, Japan, and Korea, posting positive growth in 2027.

Consequently, global steel demand excluding China is forecast to accelerate to a growth rate of 4.0% in 2027—a level that has rarely been seen in recent times. While this outlook reflects data available as of mid-March 2026, the escalating conflict in the Middle East presents a significant stress test.

Our central assumption remains a resolution by June; under this timeline, we expect steel demand in most major economies to remain resilient.

Specifically, the US, China and India appear largely insulated from direct spillovers. Furthermore, despite its high exposure, the EU has bolstered its systemic energy flexibility since the 2022 Russia-Ukraine crisis. The sharp divergence between the gas price peak in 2022 and current price levels illustrates a much more contained impact thus far.

Nevertheless, should hostilities persist beyond the second quarter, material downward revisions will be necessary, particularly for regions with high structural energy sensitivity.”  

We expect that the contraction in Chinese steel demand will narrow to -1.5% in 2026, as the housing market correction nears its bottom. Infrastructure investments in the country are expected to edge up this year, supported by local government efforts to maintain moderately strong GDP growth. We anticipate that manufacturing sectors’ steel demand will maintain moderate growth as exports continue to expand. However, a tougher global trade environment remains a significant downside risk, potentially slowing steel demand from the manufacturing sector in the coming years.

For 2027, we project Chinese steel demand to remain essentially flat relative to 2026 levels. This outlook is grounded in the expectation that the protracted real estate sector correction will have largely run its course by 2027, mitigating the severe downward pressure that has dominated the industry since 2021.

As the structural realignment of the property market stabilises, we anticipate that Chinese steel demand may transition into a period of cyclical stability.

In October of last year worldsteel forecast a 2.0% contraction in Chinese steel demand for 2025. The now published official figure for China is a 7.1% contraction. Circumstantial evidence points to a more moderate decline.  

Steel demand growth across developing economies excluding China is projected to moderate to a 2.5% pace in 2026, a significant deceleration from the roughly 5% annual growth recorded in recent years.

This cooling is primarily driven by a sharp contraction in the Middle East, where regional conflict has abruptly reversed previous growth expectations.

Furthermore, we anticipate a normalisation of demand across ASEAN economies; following a strong expansion in 2025, growth in this region is expected to temporarily soften as stockpiling activity subsides.

However, the outlook for 2027 is more robust, with growth forecast to rebound to 5.1%. This resurgence will be fuelled by sustained momentum in developing Asia and Africa, complemented by an anticipated recovery in the Middle East.  

India maintains its position as the world’s fastest-growing major steel market, with demand projected to expand by 7.4% in 2026 and accelerate to 9.2% in 2027.

This robust outlook is underpinned by broad-based strength across all key steel-consuming sectors. Growth is primarily driven by sustained, infrastructure-led construction and a thriving automotive sector fueled by increasing freight demand.

Furthermore, a resilient capital expenditure cycle continues to bolster demand for capital goods, while nationwide rail network expansion and an affordability-driven surge in consumer durables provide additional structural tailwinds.  

As highlighted in our previous release, a transformative shift has been underway across Africa since 2023, with clear indicators of a robust resurgence in construction activity and domestic steel consumption.

Our latest forecasts validate this trajectory, projecting a 3.8% growth in 2026 and 4.6% in 2027.

This sustained momentum reflects an intensifying focus on large-scale urbanisation, critical infrastructure development and economic diversification efforts, positioning Africa as an increasingly significant and resilient driver of the global steel market.  

The developed world’s steel demand grew by 0.2% in 2025, marking the end to a three-year consecutive decline since 2021.

We expect this stabilisation to pave the way for a gradual recovery, with growth reaching 1.0% in 2026 and gaining further momentum to 2.3% in 2027.

Nevertheless, it is critical to contextualise this recovery within a broader historical frame. The 2025 market size remains roughly 60 Mt (15%) lower than the levels seen in 2017–2018, indicating that a full return to pre-crisis volumes is still a long-term endeavour.  

We expect the EU+UK region’s demand to grow 1.3% in 2026 and 3.0% in 2027. The long-awaited return of steel demand growth in the EU reflects the impact of increased infrastructure and defence spending in the continent in combination with the expected improvement in macroeconomic conditions such as improvements in real household income. However, the region’s high exposure to energy price spikes remains a significant downside risk for 2026.  

Steel demand in the United States is projected to grow by 1.7% in 2026 and 2.0% in 2027. This expansion is expected to be supported by strong, technology-driven and policy-backed private sector investment, along with continued public infrastructure spending.

We anticipate a healthy recovery in the residential construction sector, driven by significant pent-up demand and gradually easing financing conditions.

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 ongoing labour shortages. Additionally, demand for durable goods may be tempered amid a softening labour market.  

• [Editor:Alakay]