Fitch Ratings has issued a cautiously optimistic outlook for the global steel industry in 2025, predicting modest growth in steel output and demand in key markets such as North America and Europe. According to the recent report the steel sector is poised for moderate recovery, with a notable focus on ferrous scrap-importing markets like India.
The report, led by Fitch’s Director of Metals and Mining, Yulia Buchneva, projects an overall increase in demand for steel in North America, contrasting with the challenges faced in 2024. While scrap processors may find some concerns in the report, particularly regarding lower raw material costs, the agency suggests that strategic investments in value-added production and new low-cost capacity will provide much-needed margin support for steel producers. The Chinese steel market, which has been the dominant force in global production, continues to show mixed signals. While China’s steel production is expected to remain restricted and slightly decline in the coming years, demand for steel is expected to stabilize due to a resurgence in manufacturing and infrastructure activity. However, a contraction in the property sector is likely to weigh on overall consumption. Fitch forecasts nearly flat steel demand in China in 2025, marking a shift from the market’s previous volatility.
Of particular interest to steel recyclers in North America and Europe is the continued expansion of the steel sector in India. As the world’s largest importer of ferrous scrap, India remains a bright spot for the global steel industry. Fitch forecasts a 12 percent growth in India’s steel consumption during fiscal year 2026 (from April 1, 2025, to March 31, 2026), driven by strong public and private sector spending. This represents a significant opportunity for steel recyclers, as the country continues to ramp up its production to meet rising demand. In India, blast furnace-based steel production remains a key route for steelmakers, but the transition to more environmentally friendly electric arc furnaces (EAF) is gaining momentum. This shift is driven by both environmental concerns and the increasing demand for carbon-efficient steel, particularly in regions like the European Union, where sustainability is becoming an essential market driver.
Meanwhile, Europe’s steel market faces a more challenging path to recovery. Real steel demand in the EU has been on the decline since 2017, except for a brief post-Covid bounce in 2021. In 2023, steel demand in the region fell by 1.4 percent, and a 3 percent drop is forecast for 2024 due to weak demand from sectors like construction and automotive, coupled with high energy prices that have undermined the competitiveness of European steel in the global market. In summary, while steel producers and recyclers in North America and Europe may face a modest recovery in 2025, India’s burgeoning steel market remains a key area of growth. With significant increases in production and consumption, India offers an encouraging prospect for both producers and recyclers in the coming years.
