The Short Range Outlook for 2026-2027 released by the World Steel Association (worldsteel) on October 12 paints a highly divergent picture of the global steel market. The core conclusion of the report is that while the global steel demand recovery trend has not disappeared, its momentum is being masked by the structural contraction of Chinese demand. Meanwhile, energy market disruptions caused by ongoing geopolitical conflicts in the Middle East have further amplified market pressures. For commodity traders, the key signal from this report is not the slight fluctuation in the global total, but rather the regional shift in growth momentum—overseas markets are becoming the primary source of demand growth.
The report forecasts that global steel demand in 2026 will remain basically flat compared to 2025 at 1.722 billion tonnes, before experiencing a recovery growth of 1.7% to 1.752 billion tonnes in 2027. This forecast has been revised downward from the April version, when the association expected a slight increase of 0.3% in 2026 and a growth of 2.2% in 2027. Alfonso Hidalgo de Calcerrada, Chairman of the worldsteel Market Research Committee, commented: "This downward revision is almost entirely due to the changing situation in China. Demand excluding China will grow by 1.5% this year and accelerate to 4.0% in 2027—a rate that is fully consistent with our forecast six months ago and represents a rare high growth level in recent years."
The Chinese market is the biggest variable in this forecast. Dragged down by a real estate downturn exceeding expectations and infrastructure investment remaining in negative growth territory, although manufacturing exports have maintained growth, they are insufficient to fully offset the gap on the construction side. China's steel demand is expected to drop by 2.0% in 2026. The contraction is expected to slow to 1.0% in 2027, with the downward slope of real estate narrowing but remaining negative overall, and infrastructure investment staying cautious. For traders, this means China's steel demand is unlikely to return to its previous high plateau in the short term, and the export structure to China needs to shift from "volume-driven" to "product mix and quality-driven."
While Chinese demand contracts, South and Southeast Asia are becoming the core source of global steel demand growth. India remains the fastest-growing major steel market globally, with demand expected to grow by 7.9% to 172.4 million tonnes in 2026 and further by 8.0% to 186.2 million tonnes in 2027, driven by infrastructure, private real estate, manufacturing expansion, and renewable energy projects.Demand in the five ASEAN countries is expected to grow by 5.2% in 2026, before slowing to 3.2% in 2027. Vietnam stands out, with residential and commercial projects combined with public investment expected to push its apparent steel consumption close to 30 million tonnes for the first time in 2026, achieving double-digit growth.
Dragged down by the Middle East conflict, steel demand in GCC (Gulf Cooperation Council) countries is expected to drop by about 11% in 2026, reversing the 17.7% high growth trend in 2025. However, the association explicitly points out that this is not a loss of demand, but rather a postponement of project awards, construction starts, and financing decisions. Once the security situation clarifies and shipping through the Strait of Hormuz normalizes, demand in the region is expected to rebound by 11.3% in 2027, returning to 2025 levels. For steel traders exporting to the Middle East, this means adjusting short-term rhythms, but the mid-to-long-term market space has not contracted.
After stabilizing in 2025-2026, industrial activity in developed economies is expected to see a broad recovery in 2027. Supporting factors include growth in AI-related investments, defense and energy transition spending, improved real household incomes, and a supportive policy environment.
EU: Apparent consumption is forecast to dip slightly by 0.3% in 2026 before growing by 3.1% in 2027. The relative strength in 2025 was partly due to companies front-loading inventories ahead of CBAM (Carbon Border Adjustment Mechanism) implementation. Fundamentals (slow construction recovery, weak automotive) remain weak.
US: Demand is expected to grow by 2.0% in 2026, driven primarily by data center and energy infrastructure investments, while the residential sector remains weak due to high interest rates. Growth is expected to slow to 1.5% in 2027.
Japan and South Korea: Both are experiencing moderate recoveries, with growth rates in the 1%-2% range for 2026-2027. Neither country is expected to return to pre-downturn demand levels in the short term.
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