The World Steel Association has lowered its global steel demand forecasts for 2026 and 2027, citing weaker consumption in China, a slower recovery in European construction and disruptions linked to the US-Israeli war with Iran.
The industry organisation now expects worldwide steel demand to decline by 0.1% in 2026, reversing its April projection of 0.3% growth.
Its forecast for 2027 has also been reduced, with global demand now expected to increase by 1.7%, compared with the previous estimate of 2.2%.
The revisions reflect a more challenging outlook for the international steel industry as geopolitical uncertainty, delayed infrastructure projects and weakness in major construction markets continue to affect consumption.
Alfonso Hidalgo de Calcerrada, chair of the World Steel Association’s economics committee, said the anticipated recovery in global steel demand was progressing more slowly and gradually than previously expected.
China and Europe Weigh on Global Steel Consumption
China remains a significant source of weakness in the global steel market, with demand expected to decline by 2% in 2026.
The association attributed the contraction to the country’s prolonged property downturn, which has continued for longer than previously anticipated.
China’s construction sector is a major consumer of steel, meaning persistent weakness in property development continues to weigh on overall demand.
The outlook has also deteriorated in Europe, where the anticipated recovery in construction activity has been slower and less consistent than expected.
The World Steel Association now forecasts that steel demand across the European Union and Britain will fall by 0.3% in 2026.
This represents a substantial downward revision from its earlier projection of 1.3% growth.
The weaker European outlook highlights the challenges facing steel producers and suppliers as construction activity struggles to regain momentum.
Gulf Steel Demand Set to Fall 11% Before Recovering in 2027
The most pronounced regional slowdown is expected in the Gulf, where the conflict involving Iran has disrupted investment decisions, construction schedules and supply chains.
Steel demand in the region is forecast to contract by 11% in 2026, followed by an 11.3% rebound in 2027.
The association suggested that much of the expected decline reflects postponed investment and construction activity rather than a permanent reduction in underlying demand.
“What we observe (in the Gulf) is not the destruction of demand but its deferral, as project awards, construction starts and financing decisions are pushed back while the security situation remains unresolved,” Hidalgo de Calcerrada said.
He added that steel consumption in the Gulf could recover strongly once regional uncertainty subsides, the Strait of Hormuz reopens and supply chains return to normal.
The Strait of Hormuz is a major shipping route for international energy and commodity trade, making disruptions to maritime activity particularly significant for industrial supply chains in the region.
The projected recovery in 2027 therefore depends partly on an improvement in security conditions and the resumption of delayed projects.
India Remains the Fastest-Growing Major Steel Market
Despite the weaker global outlook, India continues to stand out as the strongest source of growth among major steel-consuming economies.
The World Steel Association expects Indian steel demand to increase by 7.9% in 2026, followed by growth of 8% in 2027.
These projections place India ahead of other major steel markets and contrast with the expected contraction in China and parts of Europe.
India’s continued expansion provides a positive element within an otherwise subdued outlook for global steel consumption.
However, the association’s latest forecasts indicate that the broader recovery will depend on improvements in construction activity, greater geopolitical stability and the resumption of investment across regions affected by conflict.
With demand now expected to contract slightly in 2026, the global steel industry faces another year of uneven regional performance before a potentially stronger recovery in 2027.