Global Steel Production to See Modest Rise in 2025
Global crude steel production is expected to experience a modest increase in 2025 compared to 2024 levels, marking the first annual rise since 2021. This projection indicates a recovery from the 2020 shutdowns, driven by steady growth in various regions, while challenges persist in China’s steel sector.
China’s Steel Production Faces Decline
In 2024, China’s crude steel output is forecast to fall below one billion tonnes, with projections suggesting that production may dip under 900 million tonnes by the end of the decade. This decline is largely attributed to stagnant domestic steel consumption, which has peaked, thus forcing steelmakers to depend more on exports to maintain production volumes. This shift towards exporting is expected to put downward pressure on global steel prices and margins for Chinese steel producers.
India’s Steel Production to Continue Growth
In contrast, India’s crude steel production is projected to grow steadily through 2025, propelled by a structural rise in domestic demand and ongoing expansion of production capacity. India’s steel industry is aggressively ramping up its coal-based steel capacity, despite potential challenges from stricter environmental regulations like Europe’s Carbon Border Adjustment Mechanism (CBAM). However, the expansion is mainly aimed at fulfilling growing domestic demand, providing a significant boost to the local steel market.
European Steel Production to Show Modest Rebound
After a challenging 2024, European crude steel production is expected to see a slight recovery in 2025, buoyed by improved end-user demand. Steel distributors are anticipated to adjust inventory levels upwards in response to the recovery in demand. Additionally, renewed trade restrictions in Europe are set to protect regional producers from lower-cost competition, further supporting the growth of local steel production.
Growth in the Middle East and North America
The Middle East is poised to see growth in crude steel production, driven by new capacity starts and strong construction demand. The region is also emerging as a key investment hub for green steel and related raw materials, signalling a shift towards more sustainable steel production in the coming years. Meanwhile, North American steel production is set to benefit from new capacity installations in Mexico and the US, which will compensate for the closure of outdated and inefficient steel mills. The ongoing trend of reshoring manufacturing jobs to North America is expected to positively impact the upstream steel sector, with supportive government policies likely playing a role in bolstering domestic production.
Outlook for 2025 and Beyond
Fastmarkets’ forecasts for global crude steel production highlight a slow but steady recovery in 2025, with regions such as North America, Europe, the Middle East, and India driving the growth. However, China’s steel industry will face significant headwinds, which may affect overall global supply and price dynamics in the medium term. The coming years will be pivotal for steel markets as trade policies, environmental regulations, and regional demand shifts play a crucial role in shaping the industry’s future trajectory.
