Posted on 16 Apr 2026
The ongoing hostilities in the Middle East have led the World Steel Association (WSA) to substantially lower its forecast for growth in global steel demand for this year to just 0.3%, compared with its forecast issued last October for a 1.3% on-year rise.
"We expect the ongoing conflict in the Middle East to result in a sharp drop in that region's steel demand for 2026, which was otherwise positioned for strong growth." Alfonso Hidalgo de Calcerrada, chair of the WSA's Economics Committee, commented at the release of the association's short-range outlook (SRO) on April 14. A 0.3% rise would put 2026 demand at approximately 1.72 billion tonnes, Mysteel Global notes.
"Our central assumption remains a resolution (of the conflict) by June," he said. "Under this timeline, we expect steel demand in most major economies to remain resilient. Nevertheless, should hostilities persist beyond the second quarter, material downward revisions will be necessary, particularly for regions with high structural energy sensitivity," he added.
Setting aside the unexpected geopolitical tension, the WSA's Chief Economist confirmed that the overall trend of global steel demand predicted in the October 2025 SRO remains, namely for demand to bottom out over 2025-2026 "following a protracted and challenging phase of global structural adjustments" that has suppressed demand since 2022.
Longer term, the association forecasts that in 2027, steel demand will grow at the faster pace of 2.2% on year to hit 1.76 billion tonnes. "This broader recovery is being driven by distinct shifts in regional dynamics. In China the rate of demand contraction is finally decelerating, while demand growth across key developing markets, most notably India, remains vibrant," the WSA says in the release.
Regarding China, the association predicts that the contraction in Chinese steel demand will narrow to 1.5% in 2026 and stay largely flat in the year after, as the housing market correction will near its bottom this year and is expected to have largely run its course by 2027.
In addition, infrastructure investments in the country are expected to edge up this year, supported by local government efforts to maintain moderately strong GDP growth.
Furthermore, the WSA anticipates that steel demand among China's various manufacturing sectors will maintain moderate growth as exports continue to expand. However, a tougher global trade environment presents a significant downside risk, potentially slowing steel demand from the manufacturing sector in the coming years, the association also warns.
Meanwhile, steel demand in developing countries except China is expected to rise by 2.5% this year and accelerate to 5.1% in 2027, WSA notes in the release.
Notably, the revised growth rate expected for 2026 shows a significant deceleration from the roughly 5% annual growth recorded in recent years, primarily driven by a sharp contraction in the Middle East, where regional conflict has abruptly reversed previous growth expectations, the report points out.
For India, the world's second largest steelmaker, the WSA predicts that steel demand will maintain robust momentum supported by continued growth in all steel consuming sectors, with the predicted growth rate registering 7.4% in 2026 and 9.2% in 2027.
The steel demand among the developed economies rose by 0.2% in 2025, marking the first on-year rise after declining for three consecutive years. The association expects the on-year growth to persist, with the speed reaching 1% in 2026 and gaining further momentum to 2.3% in 2027.
Specifically, the association sees steel demand in the EU and UK climbing by 1.3% this year and 3% in 2027, mainly due to the "increased infrastructure and defence spending on the continent, in combination with improving macroeconomic conditions and improvements in real household income."
Meanwhile, steel demand in the US is expected to rise by 1.7% in 2026 and 2% in 2027, underpinned by some supportive factors including strong, technology-driven and policy-backed private sector investment as well as continued public infrastructure spending.
Source:Mysteel Global
