Steel market outlook & forecasts for 2025 2026 prices.

Market Outlook - Forecasts - World Steel Prices

Year 2025+ Steel Price Projections

The note that follows considers near-term steel price forecasts - that is, the outlook for world steel prices in 2025 and beyond.

A notable characteristic of world steel prices is that they are highly cyclical. As can be seen in the chart below, prices move from peak to trough every few years. Looking at pricing for typical steel products such as hot rolled coil (HRC) or reinforcing bar, the latest prominent peaks occurred in August 2011, April 2018 and September 2021; with price troughs occurring in May 2009, February 2016 and June 2020. Across these products, the average peak-to-peak or trough-to-trough time over the last 25 or so years works out at ~3-4 years. In our view, the next price peak can be expected around 2028 or perhaps 2029. We also forecast that the next pricing trough will occur in mid-2025 or more probably (see below) at end-2025.

It is MCI's view that - at the time of writing (end-2024) - international steel prices still appear to be declining, dropping from a September 2021 high. Other independent observations appear to agree with this view of the steel market outlook, as discussed below.

Another way to consider the pricing outlook is to consider future prospects for the global steel supply-demand balance. In this respect, it is noteworthy that:

• The World Steel Association (worldsteel) consider that global steel demand in 2025 will grow by 1.2% over 2024 levels (from ~1751 million tonnes finished products in 2024, to ~1772 million tonnes). This is equivalent to a 2025 increase in global steel consumption of ~21 million tonnes [See Worldsteel, Short Range Outlook October 2024].
• The OECD meanwhile [see Chairman's statement, 96th Steel Committee meeting reported that an additional 50 million metric tonnes (mmt) of new capacity will enter the market in 2024, bringing world overcapacity to ~573 million tonnes. Even adjusting for yield losses from crude stel to finished steel (perhaps 10%), it is clear that the rate of supply growth (arounf 45 million tonnes) will easily outstrip the rate of steel demand growth (just 25 mt).

On this basis, we judge that year 2025 capacity utilisation is likely to fall below 2024 levels, leading to further near-term reductions in world steel prices.

Taken together, MCI's judgement regarding the current level of steel prices in the context of the longer-term price cycle; with our assessment of expected changes to the steel supply demand balance in 2025 – all point to declining steel prices as year 2025 unfolds. The MCI projection therefore is that steel prices will continue to fall in early 2025, reaching a trough around mid-2025 or end-2025. A very gradual return to the next peak in the steel cycle in 2028 or 2029 will then ensue. The phasing out of free allowances under the EU ETS starting in 2026 will accelarate this price recovery in Europe.

In August 2024, Baowu Steel's chairman Hu Wangming warned staff of harsh market conditions that were proving longer and more difficult to endure than previously expected, as China's property downturn shows no sign of recovery. Shipments from China are on track to reach ~100 million tonnes in 2024 as producers there scramble to offset the domestic slowdown; and are likely to depress international steel prices for some months to come. Other recent press reports also express concern about the current steel industry downturn noting that the global impact of China's steel overproduction is becoming increasingly evident.

Eurometal reported in early December 2024 that expectations of a rebound in European HRC prices the first quarter of next year was being tempered by a persistent lack of demand and by oversupply. See Hopes for European steel price rebound in early 2025. To MCI, this confirms the view that the bottom of the current steel cycle may not now occur until mid- to late-2025.

For MCI's projected monthly steel prices in H1 2025 and beyond, see our our steel price projections page.