Global steel demand to recover modestly in 2026, strengthen in 2027 - WSA outlook

• Global steel demand to grow 0.3% y-o-y in 2026, 2.2% in 2027
  
  
• India set to lead growth with 7.4% y-o-y in 2026, 9.2% in 2027
  
  

The World Steel Association (WSA) has released its Short Range Outlook (SRO) for 2026 and 2027, pointing to a gradual recovery in global steel demand after a prolonged period of structural adjustment.

Global steel demand is forecast to grow by 0.3% y-o-y in 2026 to reach 1,724 million tonnes (mnt), before accelerating to 2.2% in 2027, lifting demand to 1,762 mnt.

Commenting on the outlook, Alfonso Hidalgo Calcerrada, Chief Economist at UNESID and Chair of the worldsteel Economics Committee, said global demand is likely to bottom out during 2025-2026 following a prolonged downturn since 2022. While conditions are stabilising, demand is expected to remain subdued in 2026 before a broader recovery takes shape in 2027.

Regional divergence persists

The outlook highlights a divergence in regional trends across key markets

India: India will remain the fastest-growing major steel market, with demand projected to rise 7.4% in 2026 and 9.2% in 2027. Growth is driven by strong infrastructure activity, a robust automotive sector, rising capital expenditure, rail expansion, and steady consumer demand.

China: Steel demand contraction is expected to moderate to -1.5% in 2026, as the housing sector downturn nears its bottom. Infrastructure investment is likely to provide support, while manufacturing demand remains relatively resilient, aided by exports. However, rising global trade pressures pose downside risks. Demand is expected to stabilise in 2027 as the real estate correction runs its course.

Developing economies (excluding China): Growth is expected to slow to 2.5% in 2026, compared to around 5% in recent years. This moderation is largely due to a sharp decline in Middle East demand amid ongoing conflict, along with easing ASEAN demand following strong stockpiling in 2025. Growth is forecast to rebound to 5.1% in 2027, supported by recovery in the Middle East and continued strength in Asia and Africa.

Africa: Demand is projected to grow steadily, rising 3.8% in 2026 and 4.6% in 2027, supported by urbanisation, infrastructure development, and economic diversification.

Developed markets show gradual recovery

Steel demand in developed economies is beginning to recover. After marginal growth of 0.2% in 2025, demand is forecast to increase by 1.0% in 2026 and 2.3% in 2027.

EU and UK: Demand is expected to grow 1.3% in 2026 and 3.0% in 2027, supported by infrastructure and defence spending, along with improving household incomes. However, energy price volatility remains a concern.

United States: Demand is projected to rise 1.7% in 2026 and 2.0% in 2027, driven by strong private investment and infrastructure activity. A gradual housing recovery is expected, though high costs and interest rates may constrain growth.

Middle East conflict remains key risk

The ongoing Middle East conflict continues to pose a major uncertainty and is expected to significantly reduce regional demand in 2026, reversing earlier growth expectations.

The outlook assumes conditions improve by mid-2026, limiting the global impact. However, a prolonged conflict could lead to downward revisions, particularly in energy-sensitive regions such as Europe.

Notably, steel demand excluding China is projected to grow by 5.1% in 2027, highlighting a gradual shift in global demand dynamics, with emerging markets playing an increasingly important role.