World Steel trims 2026 demand forecast as China and Gulf weaken

what happened

Reuters reports that the World Steel Association lowered its global steel demand estimate on Monday. It now expects consumption to decline by 0.1% in 2026, compared with the 0.3% increase projected in April. Weaker demand in China and disruption stemming from the US-Israeli war with Iran are weighing on consumption.

Alfonso Hidalgo de Calcerrada, chair of World Steel’s economics committee, said the recovery was progressing more slowly and gradually than expected. The association also reduced its 2027 growth forecast to 1.7% from 2.2%. Chinese steel demand is projected to drop 2% this year, as the country’s property downturn is lasting longer than World Steel had anticipated.

The outlook for the European Union and Britain has shifted from 1.3% growth to a 0.3% contraction in 2026, with construction recovering more slowly and unevenly. Gulf demand is expected to plunge 11% this year before rising 11.3% in 2027. World Steel described this as postponed rather than destroyed demand, with project awards, construction starts and financing decisions delayed while security concerns persist. It expects a strong recovery once uncertainty fades, the Strait of Hormuz reopens and supply chains normalize. India remains the fastest-growing major market, with demand forecast to rise 7.9% in 2026 and 8% in 2027.

why it matters

The downgrade points to a widening regional split in steel consumption: China, Europe and the Gulf are weakening, while India continues to expand. That divergence is central to the industry’s revised global outlook.

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