US set to overtake Japan as 3rd-largest crude steel producer in CY’25

• Japan’s crude steel output falls on weak domestic demand
• US production climbs up amid tariffs, capacity expansions

The United States (US) is poised to overtake Japan as the world’s third-largest crude steel producer in 2025, in what would be the first major change in global steel rankings in more than two decades. Both nations are forecast to produce around 82 million tonnes (mnt) this year, but US output is projected to pull ahead, trailing only China and India.

The shift reflects diverging market fundamentals. Japan’s crude steel output continues to contract on the back of weak domestic demand, especially from the construction and building sectors. In contrast, US production is strengthening, driven by tariff protection and significant capacity additions.

According to the World Steel Association, Japan produced 47.5 mnt of crude steel in January-July 2025, down 4.7% y-o-y. This was marginally ahead of the US at 47.4 mnt, whose output grew 1.5% y-o-y.

However, on a m-o-m basis since May, US mills have outproduced Japan, supported by higher utilisation rates and new capacity additions. Market participants indicate the sustained trend points to a likely reversal in full-year output rankings, with the US expected to move ahead by end-2025.

Key drivers

A key driver of the US output surge has been the Trump administration’s decision to lift steel import tariffs to 50% under Section 232 of the Trade Expansion Act. The move has pushed producers to ramp up output, with American Iron and Steel Institute data showing utilisation rates rising from 73% in January to nearly 79% since June.

Cleveland Cliffs and other major mills reported record shipments, reflecting stronger production momentum. Imports, still averaging above 2 mnt per month, are gradually easing as domestic supply builds. Market participants expect this trend to persist into H2CY’25, supported by lower Federal Reserve interest rates that could revive construction demand.

Supply expansions

US steelmakers are supporting output growth with fresh capacity additions. Big River Steel has completed phase two of its Arkansas expansion, Nucor is developing a 3-mnt electric arc furnace plant in West Virginia, and North Star BlueScope is lifting annual capacity by 10%. These projects are expected to deliver sustained medium-term production gains.

Outlook

Washington’s extension of tariff measures to a wider range of steel and aluminium products reinforces support for domestic manufacturing. Combined with capacity growth and a gradual demand recovery, these factors are set to place the US ahead of Japan in global steel output from 2025.