In Goldman’s latest global steel outlook, analysts Aurelia Waltham, Eoin Dinsmore, and others highlight a key inflection point: China’s share of global steel production has declined for the first time in over two decades, reversing a multi-decade expansion period.
“After more than two decades of China increasing its share of global steel production, we believe this structural trend has now come to an end as China’s domestic demand continues to falter and barriers to steel exports intensify,” Waltham and her team wrote in a note published on Friday morning.
The analysts noted that their global steel supply and demand model forecasted a 3% and 4% year-over-year increase in ex-China steel demand for 2025 and 2026, respectively. As Chinese steel exports are expected to decline, ex-China crude steel production is projected to rise by 3% in 2025 and 8% in 2026.
“While we are bearish on US and European steel prices on the three-to-six month horizon, we expect a re-acceleration in demand growth and lower Chinese steel exports to provide price upside in 2026,” Waltham said.
They outlined the biggest risk to their forecast of China losing global market share:
We see the biggest risk to our call that China will start to lose market share of global steel production to the rest of the world over the next two years being indirect[1] Chinese steel exports continuing to climb, pushing down rest of world apparent steel demand. This would likely see China steel demand from the manufacturing sector exceeding our current expectations, preventing a decline in Chinese steel output and apparent domestic demand, while at the same time meaning rest of world steel production growth would fall below end use consumption growth. However, this would be at odds with China’s policy to reduce steel output.
Following a 25-year expansion that saw China increase its share of global steel production from approximately 15% in 2000 to about 55% by 2020, analysts now forecast a decline to about 50% by 2026.
China’s steel production for 2025 already peaked in March.
Key takeaways about China’s declining influence in global steel markets:
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Peak Reached: China’s steel production likely peaked in March 2025 and is expected to decline by 2–3% YoY through 2026.
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Domestic demand slowdown: A continued decline in construction activity, especially new housing starts (forecasted to drop 24% in 2025), will more than offset gains from manufacturing (e.g., autos and appliances).
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Export headwinds: Chinese finished and semi-finished steel exports are forecast to drop 33% YoY in 2026, from 12% to under 8% of ex-China steel consumption.
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Policy risk: If exports or output stay elevated, the Chinese government may impose mandated production cuts (likely via emissions controls) in Q4 2025 to meet policy targets.
China’s economy is still a mess. Property sector will continue to weigh on steel demand.
However, the analysts view a rebound in ex-China steel:
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Ex-China growth: Production outside China is expected to rise 3% in 2025 and 8% in 2026, helped by recovering demand and lower competition from Chinese exports.
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Regional demand: Demand in the U.S., EU, and India will gradually improve. Apparent demand outside China is forecast to rise 3–4% annually into 2026.
Global Steel Price Outlook:
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Near-term weakness: U.S. and European prices face further downside in the next 3–6 months due to lackluster demand and high inventories.
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2026 upside: Prices are forecast to rise in 2026 as Chinese exports fall and global demand picks up, particularly in Asia and the EU. Anti-dumping measures and trade friction will help contain Chinese supply abroad.
European Steel Price Forcast
US Hot Rolled Coil Price Forecast
The long-standing concern over China flooding global markets with steel may finally be easing—a shift that could pave the way for Western producers to ramp up output. We anticipate this trend will be evident in the U.S amid President Trump’s ‘America First’ era.
Tyler Durden
Fri, 05/23/2025 – 10:45
