Global Steel Demand Recovery Driven by Infrastructure and Green Transition

Global steel demand is forecast to grow 1.3% in 2026 to 1,773 million tonnes, according to the World Steel Association. The recovery is notable because it is being driven by structural factors (infrastructure investment and the energy transition) rather than a cyclical rebound in construction or automotive, which remain weak in several key markets.

India is the standout growth story, with steel demand expected to grow 9% over 2025-26. The Indian government's National Infrastructure Pipeline and Production-Linked Incentive schemes are driving steel-intensive investment in railways, highways, and manufacturing capacity. India is expected to become the second-largest steel producer globally within the next five years.

European steel demand is expected to grow 3.2% in 2026, the first meaningful growth since 2021. The EU's Green Deal industrial plan, including investments in renewable energy, grid modernization, and EV charging infrastructure, is creating structural steel demand that is partly insulated from the region's economic challenges.

The US market remains supported by the Infrastructure Investment and Jobs Act (IIJA), which is in its peak spending phase. Bridge and highway projects, public transit, and broadband infrastructure are all steel-intensive. The CHIPS Act is driving semiconductor fabrication plant construction, with each fab requiring 50,000-100,000 tonnes of steel.

China remains the wild card: steel demand is declining as the property sector contracts, but export volumes have surged as Chinese mills seek markets for excess capacity. This has created trade friction with the EU, US, and other markets, leading to the new EU quota regime that is expected to reduce Chinese steel imports significantly.