- India to remain fastest-growing major steel market with 8% growth in 2027
- Vietnam to lead ASEAN-5 with double-digit steel consumption growth in 2026
Global steel demand is forecast to remain largely unchanged at 1,722 million tonnes (mnt) in 2026 before increasing by 1.7% to 1,752 mnt in 2027, according to the World Steel Association’s (worldsteel) October Short Range Outlook (SRO). The latest forecast marks a downward revision from the April outlook, which projected global demand growth of 2.2% in 2027. The revision is primarily attributed to a sharper-than-expected contraction in China and continued energy market disruptions amid instability in the Middle East.
Commenting on the outlook, Alfonso Hidalgo de Calcerrada, Chair of the worldsteel Economics Committee, said the recovery in global steel demand was progressing more gradually than anticipated. While demand outside China is expected to grow by 1.5% in 2026 and accelerate to 4% in 2027, China’s structural contraction continues to weigh on global demand.
He added that developed economies are expected to see a broader recovery in industrial activity and steel demand in 2027, supported by investment in artificial intelligence (AI), defence, the energy transition and infrastructure, alongside improving household incomes. However, continued geopolitical uncertainty and the risk of further energy-market disruptions remain concerns.
China’s steel demand to contract in 2026
Chinese steel demand is forecast to contract by 2% in 2026, a downward revision from the April outlook, as the downturn in property investment has persisted longer than anticipated. Infrastructure investment has also remained negative, contrary to expectations that it would support demand this year.
Although manufacturing-related steel demand continues to grow on the back of strong exports, the increase has not been sufficient to offset weakness in real estate and infrastructure.
In 2027, the contraction in Chinese steel demand is expected to narrow to 1%. The real estate downturn is projected to moderate, although real estate activity is likely to remain weak. Infrastructure investment is expected to remain constrained by the government’s cautious approach, while manufacturing should sustain moderate growth, provided exports hold up. However, rising trade frictions remain a key risk to the outlook.
Developing economies outside China to see stronger growth in 2027
Steel demand in developing economies excluding China is projected to grow by 1.9% in 2026 and 5.1% in 2027. The slower growth this year, compared with the roughly 5% annual expansion recorded in recent years, is largely attributable to the Middle East, where regional conflict has reversed the strong demand growth seen previously.
Outside the Middle East, underlying demand momentum remains intact. The recovery in 2027 is expected to be driven by Developing Asia and a rebound in the Middle East as the impact of geopolitical uncertainty eases.
India to remain fastest-growing major steel market
India is expected to remain the world’s fastest-growing major steel market, with demand forecast to increase by 7.9% to 172.4 mnt in 2026 and by a further 8.0% to 186.2 mnt in 2027.
Growth is expected to remain broad-based, led by infrastructure development and construction activity, while private real estate demand remains robust. Healthy manufacturing activity, a substantial renewable energy project pipeline and continued expansion of manufacturing capacity are supporting demand for electrical and mechanical machinery.
Additionally automotive production is also expected to benefit from domestic demand, export momentum and policy support, contributing to sustained growth in steel consumption.
Gulf steel demand hit by regional conflict
Steel demand in the Gulf Cooperation Council (GCC) is forecast to decline by around 11% in 2026, reversing the 17.7% growth recorded in 2025. The earlier expansion was supported by economic diversification programmes, a strong project pipeline and healthy housing activity in Saudi Arabia and the UAE.
The decline primarily reflects delays in project awards, construction starts and financing decisions as uncertainty surrounding the regional security situation persists. According to worldsteel, the disruption has deferred demand rather than destroyed it.
Once the security situation improves, the Strait of Hormuz reopens and supply chains normalise, steel demand is expected to recover. GCC demand is consequently forecast to rebound by 11.3% in 2027, returning to its 2025 level.
Vietnam to lead ASEAN-5 steel demand growth
Steel demand in the ASEAN-5 economies is forecast to grow by 5.2% in 2026 before moderating to 3.2% in 2027.
Vietnam is expected to be the region’s strongest performer, with production and trade data indicating double-digit growth in steel demand this year. Apparent steel use is projected to reach around 30 mnt for the first time, supported by record levels of residential and commercial building activity and a robust public investment programme.
Developed economies set for industrial recovery in 2027
Steel demand in developed economies is forecast to grow by 1% in 2026 and 2.2% in 2027, following stabilisation in 2025. However, the recovery is expected to remain gradual.
The developed world steel market in 2025 was approximately 60 mnt, or 15%, below its 2017-2018 level. The projected growth over 2026-2027 is expected to recover only around 10 mnt of this shortfall, indicating that a full return to pre-crisis consumption levels remains a longer-term prospect.
Worldsteel expects industrial activity to strengthen across developed economies in 2027, supported by investment in AI, defence, the energy transition and infrastructure, alongside improving household incomes and supportive policy measures.
EU steel demand to recover in 2027
Apparent steel use in the European Union (EU) is forecast to decline by 0.3% in 2026 before growing by 3.1% in 2027. The 2026 forecast represents a downward revision of 1.5 percentage points from the April outlook.
Although steel demand in 2025 was stronger than previously anticipated, a significant portion of the improvement reflected stockbuilding ahead of the Carbon Border Adjustment Mechanism (CBAM) taking effect in 2026.
Underlying conditions have also disappointed. The construction recovery remains slower and more uneven than expected, with residential building permits showing signs of stabilisation while completions remain in contraction. The automotive sector continues to weigh on demand.
Nevertheless, improving sentiment and higher spending on infrastructure and defence are expected to support a stronger recovery in steel-consuming sectors from 2027. Higher real household incomes and civil engineering activity linked to energy and rail investments are also expected to contribute to growth.
US steel demand supported by infrastructure and data centre investments
US steel demand is projected to grow by 2.0% in 2026, supported by strong investment in data centres and energy infrastructure, including power generation, renewable energy and oil and gas projects. Selected manufacturing sectors are also contributing to growth.
In 2027, apparent steel use is expected to increase by approximately 1.5%. Demand growth is likely to remain concentrated in non-residential construction, major infrastructure and energy projects, and selected manufacturing end markets.
Residential construction, however, is expected to remain comparatively weak due to subdued homebuilder sentiment, elevated mortgage rates, affordability constraints and high construction costs.
Japan and South Korea to record modest recoveries
Steel demand in Japan and South Korea is expected to recover gradually following several difficult years, although neither market is projected to return to pre-downturn consumption levels within the forecast period.
In Japan, demand is forecast to grow by 0.9% in 2026 and 1.7% in 2027. Construction is expected to shift from a drag on demand to a source of support, while higher corporate capital investment is likely to benefit machinery demand. The automotive sector, however, is expected to remain under pressure.
In South Korea, steel demand is projected to increase by 1.8% in 2026 and 1.3% in 2027, following a sharp decline in 2025. Construction activity is expected to stabilise and begin a partial recovery in the second half of 2026, while automotive production and shipbuilding activity are projected to return to modest growth.
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