Production GrowthAcross Both Traditional and Modern Methods
Global pig iron production showed solid growth in March2025, reaching 120.8 million tons according to the latest data from the WorldSteel Association. This represents a 2.4% increase compared to March 2024 and amore substantial 6.7% rise from February 2025, indicating strengtheningmomentum in the global steel industry's primary input material.
The production increase spans both traditional and modernmanufacturing methods. Blast furnace production, which continues to dominatethe global landscape, reached 110.2 million tons in March, up 1.5%year-over-year and 5.4% from the previous month. Meanwhile, direct reductionmethods, which typically have lower carbon emissions, showed even strongergrowth at 10.6 million tons, an 8.9% year-over-year increase and a significant22.6% jump from February.
First Quarter ShowsStabilization After 2024 Decline
The first quarter of 2025 shows the global pig iron marketstabilizing after the contraction experienced in 2024. Total production forJanuary-March 2025 reached 346.34 million tons, representing a slight 0.04%increase compared to the same period last year. This modest growth follows a1.3% decline for the full year 2024, when global production fell to 1.391billion tons.
The quarterly breakdown shows:
- Blast furnace method: 317.49 million tons (91.7% oftotal)
- Direct reduction method: 28.85 million tons (8.3% oftotal)
While the growth is minimal, the reversal of the downwardtrend seen throughout much of 2024 suggests potential stabilization in globalsteel markets after a challenging period affected by economic slowdowns in keyregions, particularly China.
China MaintainsDominant Position Despite Slower Growth
China continues to dominate global pig iron production,accounting for approximately 62.4% of the global total in the first quarter of2025. Chinese output reached 216.28 million tons in January-March, showing amodest 0.8% increase year-over-year. This represents a recovery from 2024'sperformance, when Chinese production declined by 2.3% for the full year.
The relatively slow growth in Chinese production reflectsthe country's ongoing economic challenges, particularly in the property sector,which has traditionally been a major consumer of steel products. However, thereturn to positive territory suggests that stimulus measures and infrastructurespending may be providing some support to the country's steel industry.
India ContinuesStrong Growth Trajectory
India maintained its position as the second-largest pigiron producer globally, with first-quarter output of 38.03 million tons, arobust 6.2% increase compared to the same period in 2024. This continues thestrong performance seen throughout 2024, when Indian production grew by 6.7%.
India's growth stands in stark contrast to most other majorproducers and reflects the country's ongoing industrialization andinfrastructure development. With substantial investments in construction,automotive manufacturing, and infrastructure projects, India remains one of thefew bright spots for steel demand growth globally.
Other MajorProducers Show Mixed Results
Beyond the top two producers, results among major pig ironmanufacturing nations were mixed in the first quarter:
- Russia produced 15.16 million tons, showing minimalgrowth of 0.1% year-over-year, but improving from the 5.4% decline seen in 2024
- Japan's output fell by 3.7% to 14.82 million tons,continuing the contraction experienced in 2024
- South Korea saw production decline by 2.8% to 10.68million tons, slightly better than its 2024 performance
These results reflect the challenging conditions facingmature industrial economies, including high energy costs, environmentalregulations, and subdued domestic demand in key steel-consuming sectors.
Production Methods Highlight Decarbonization Challenges
The breakdown between blast furnace and direct reductionmethods provides insight into the steel industry's decarbonization journey.While direct reduction methods, which typically have lower carbon emissions,showed stronger percentage growth, they still account for only 8.3% of globalproduction in the first quarter.
The continued dominance of the more carbon-intensive blastfurnace route (91.7% of production) underscores the significant challengesfacing the industry as it attempts to reduce emissions in line with globalclimate goals. The capital-intensive nature of steel production and the longoperational lifespans of blast furnaces mean that the transition tolower-carbon technologies will likely be gradual.
Backdrop &Context
Pig iron is the intermediate product created when iron oreis smelted with coke (processed coal) in a blast furnace, or through directreduction processes using natural gas or hydrogen. It serves as the primaryinput for most steel production worldwide, with the notable exception ofelectric arc furnace operations that primarily use scrap steel.
The steel industry globally has been facing multiplechallenges in recent years, including:
1. Economic slowdowns in key markets, particularly China'sproperty sector
2. High energy costs, especially in Europe
3. Increasing pressure to decarbonize production
4. Trade tensions and protectionist measures in variousmarkets
5. Geopolitical disruptions, including the Russia-Ukrainewar
Against this backdrop, the modest growth in pig ironproduction suggests a tentative stabilization rather than a robust recovery.The divergent performance between regions, with India showing strong growthwhile mature markets struggle, highlights the shifting geography of globalsteel production.
Looking Forward
The first quarter data provides several indicators for theremainder of 2025:
1. Modest overall growth: The slight increase in globalproduction suggests that 2025 may see a return to growth after 2024'scontraction, though likely at modest rates.
2. Regional divergence: The contrast between India's stronggrowth and the stagnation or decline in mature markets is likely to continue,gradually shifting the center of gravity of global steel production.
3. Production method evolution: The stronger growth indirect reduction methods indicates the industry's gradual shift towardlower-carbon technologies, though the pace remains insufficient to meetambitious climate targets.
4. China's pivotal role: With over 60% of globalproduction, developments in China's economy, particularly its property sectorand infrastructure spending, will continue to be the primary determinant ofglobal trends.
5. Ukraine's recovery potential: The continued resilienceof Ukraine's steel industry suggests potential for further recovery if securityconditions stabilize, though a return to pre-war capacity remains a distantprospect.
As the global economy navigates uncertain conditions,including persistent inflation in many regions, ongoing geopolitical tensions,and the transition to lower-carbon technologies, the steel industry'sperformance will remain a key indicator of broader industrial and constructionactivity worldwide.
Key Takeaways:
* Global pig iron production reached 120.8 million tons inMarch 2025, up 2.4% year-over-year and 6.7% month-over-month
* First quarter production totaled 346.34 million tons, aslight 0.04% increase from Q1 2024
* Blast furnace method accounted for 317.49 million tons(91.7%), while direct reduction method produced 28.85 million tons (8.3%)
* China remains the dominant producer with 216.28 milliontons in Q1 2025 (+0.8% y/y)
* India showed the strongest growth among major producers,with Q1 output of 38.03 million tons (+6.2% y/y)
* Ukraine ranked 14th globally with 1.7 million tons in Q12025, showing 7.2% growth despite ongoing war conditions
* The modest growth follows a 1.3% decline in global pigiron production for the full year 2024
