Steel Production & Consumption: Global Shifts in 2024-2025
Steel has been a cornerstone of industrial development and economic progress for centuries, serving as a fundamental material for infrastructure, transportation, machinery, and a vast array of consumer goods. As we move into 2024 and anticipate 2025, the global steel industry is witnessing a fascinating blend of challenges and opportunities. From production adjustments in response to fluctuating demand to the push for sustainability and decarbonization, the industry is adjusting to both economic and environmental pressures. This article will provide an extensive analysis of steel production and consumption trends across major global economies, exploring the various drivers behind these shifts.
1. Global Steel Consumption Trends
Steel consumption remains one of the most important indicators of global industrial and economic health. Given its ubiquitous use in construction, automotive manufacturing, infrastructure projects, and industrial machinery, the steel industry is directly tied to the broader industrial activity that shapes a nation’s economic landscape. In 2024, steel consumption was influenced by a combination of economic recovery post-pandemic, growth in key emerging markets, and the increasing importance of sustainable production practices.
Construction Sector: A Foundation of Steel Demand
The construction sector is by far the largest consumer of steel, accounting for nearly half of global steel demand. In 2024, steel consumption in this sector experienced a resurgence, fueled by increased demand for both residential and commercial infrastructure projects. Key drivers for this growth included rapid urbanization in developing nations, government-led stimulus measures for infrastructure, and pent-up demand for housing. In emerging economies, particularly in regions like Southeast Asia, Latin America, and the Middle East, large-scale construction projects, including residential developments, highways, and railways, helped stimulate steel demand.
In China, which remains the world’s largest steel consumer, the government’s focus on green building initiatives and its continued push for urban development contributed to sustained steel consumption. However, at the same time, regulatory measures aimed at reducing overproduction and carbon emissions placed a lid on some of the residential construction sector’s growth. This shift reflects a broader trend of tightening environmental regulations, which are gradually altering the types of steel used in construction, prioritizing sustainable building materials and technologies.
Automotive Sector: Adapting to Changing Needs
The automotive sector, traditionally one of the largest steel consumers, faced both new challenges and new opportunities in 2024. A key trend driving steel demand was the rise of electric vehicles. EVs require lighter, stronger, and more specialized steel products, such as high-strength alloys and ultra-lightweight materials, to reduce energy consumption and extend driving range. As a result, the automotive industry has shifted its focus to more advanced steel grades, which are crucial for reducing vehicle weight without compromising safety.
However, the automotive industry also faced supply chain issues, including semiconductor shortages and logistical challenges, which impacted production in some regions, thus slowing steel demand in certain markets. Despite these setbacks, the increasing adoption of electric vehicles, coupled with the global trend toward greener manufacturing processes, helped maintain robust steel consumption levels in the automotive sector. In 2025, steel demand from this sector is expected to grow further as the transition to EVs accelerates globally.
Infrastructure Development and Steel Demand
Infrastructure development remains a crucial driver of steel demand. In 2024, steel consumption was particularly strong in regions investing heavily in public infrastructure, including renewable energy projects, roads, bridges, and airports. For example, countries such as India, Brazil, and many African nations ramped up their infrastructure spending to support economic growth and improve transportation and energy access.
Renewable energy projects also contributed significantly to steel demand. Steel is a key component in the construction of wind turbines, solar panel frames, and energy-efficient power grids. With the global shift toward greener energy sources, steel demand from the renewable energy sector increased significantly in 2024. This trend is expected to continue through 2025, as countries intensify their efforts to reduce carbon emissions and enhance their energy infrastructure.
2. Steel Production Trends: Adjusting to Changing Demand
The dynamics of steel production in 2024 were shaped by a range of factors, including evolving demand from key industries, technological advancements in manufacturing, and global pushes toward sustainability. Steelmakers worldwide were under increasing pressure to adopt cleaner technologies, including hydrogen-based steel production methods and electric arc furnaces, to comply with tightening environmental regulations.
Increased Production from Electric Arc Furnaces
Electric arc furnaces have become an increasingly popular method of steel production due to their lower carbon footprint compared to traditional blast furnaces. EAFs rely on scrap steel as the primary raw material and are powered by electricity, which makes them more energy-efficient and environmentally friendly. The global shift toward electric arc furnace technology was one of the most significant trends in 2024, particularly in regions where electricity is abundant and low-cost.
In 2024, many countries, including the United States, Japan, and several European nations, invested heavily in converting their steel mills to EAF-based systems. These efforts were part of a broader strategy to reduce carbon emissions and improve production efficiency. With the increasing availability of renewable energy, EAFs are expected to play an even more prominent role in the steel industry in 2025.
Adjustments in Traditional Steelmaking Methods
While EAF technology is on the rise, traditional blast furnace-based steelmaking still dominates in some regions, particularly in China and India, where steel production volumes are massive and coal remains a cost-effective resource. However, China, which has historically been the largest emitter of CO₂ from steel production, has made strides to curb its environmental impact. In 2024, the government enacted stricter regulations aimed at reducing overproduction and carbon emissions in the steel sector.
Looking ahead to 2025, China is expected to focus more on improving energy efficiency and investing in sustainable alternatives such as hydrogen-based steel production. While this shift may reduce steel production in some regions, it will likely foster greater innovation and investment in cleaner technologies.
3. Global Steel Trade Dynamics and Consumption Patterns
Steel trade is a critical aspect of the global steel market, and fluctuations in trade policies, geopolitical tensions, and production capacities have far-reaching implications for the global steel industry. In 2024, steel trade was impacted by a combination of factors, including rising protectionist measures, trade wars, and new regulations aimed at curbing cheap imports.
Trade Barriers and Geopolitical Tensions
Trade barriers such as tariffs, anti-dumping measures, and sanctions continued to shape the global steel trade in 2024. For instance, in the United States, the Section 232 tariffs on steel imports aimed at protecting domestic producers from cheaper foreign steel remained in place, impacting steel imports from key producers such as China, Japan, and South Korea. Similarly, the European Union enforced anti-dumping measures to prevent the influx of low-cost steel from countries with less stringent environmental regulations.
These trade barriers have often resulted in increased steel prices and supply chain disruptions. While these measures benefit domestic steel producers, they can create trade frictions and disrupt international markets. As these barriers are expected to continue in 2025, steel producers in various regions may find it more challenging to access global markets, leading to increased regional competition and potential shifts in consumption patterns.
Changing Consumption Patterns in Emerging Markets
As developing economies continue to grow, the demand for steel in these regions is set to rise sharply. Countries like India, Brazil, and parts of Africa are urbanizing at a rapid pace, creating increasing demand for steel in the form of long products for construction and infrastructure projects. As these economies grow, steel consumption for automotive manufacturing is also rising, as more vehicles are produced domestically.
At the same time, in nations like China, there has been a marked shift toward consumption-focused, high-tech industries, which could lead to a reduction in steel consumption in traditional, steel-intensive sectors like construction. Instead, there will be a demand for more specialized steel products, which are used in industries such as technology and electronics.
Steel Production and Consumption for 2024 (Top 10 Steel-Producing Countries)
Country Estimated Total 2024, million metric tons
China 1,007.6
India 148.3
Japan 84.0
United States 79.3
Russia 70.4
South Korea 63.5
Germany 37.4
Türkiye 36.9
Brazil 34.0
Iran 31.1
4. Outlook for 2025: Shifting Global Consumption and Production Landscape
As we move into 2025, the global steel industry will continue to evolve, driven by factors such as increased demand from emerging markets, shifting consumption patterns, and a strong push for sustainability. The continued adoption of electric arc furnaces and other energy-efficient technologies will further shape the steel production landscape.
In addition, trade barriers, geopolitical tensions, and shifting consumption patterns in emerging economies
World Steel Production and Demand: The Path to Recovery in 2025
The global steel market faced a challenging year in 2024, with production declining significantly in the second half of the year. Global steel production for the first three quarters of 2024 reached 1,391 million metric tons, a 1.6% decrease, or 23 million metric tons, compared to the same period in 2023. This reduction in production came amid ongoing weaknesses in the global economy and manufacturing sectors, exacerbated by factors such as low household purchasing power and tight financing conditions that have hampered demand for steel, particularly in the housing sector.
Steel Demand Faces Continued Weakness
Steel demand has remained under pressure, and the World Steel Association downgraded its short-term outlook for 2024, marking the third consecutive year of expected decline in global steel demand. It is now forecast to fall by 0.8% in 2024. This persistent decline in demand is driven largely by weak industrial output that has plagued economies since the beginning of 2023. Additionally, a slowdown in housing construction continues to weigh heavily on steel consumption, particularly in countries facing economic instability and reduced consumer spending.
A key factor behind the ongoing decline in steel demand has been the prolonged downturn in the residential construction sector, which has not fully recovered from earlier economic shocks. Tightened financing, combined with shrinking disposable incomes in some regions, has led to reduced construction activities, further dampening the demand for steel products. With these negative trends, the steel market has been under strain, with steelmakers facing increasing competition for limited market share.
Projections for Recovery: A Modest Rebound in Demand and Production
Despite the challenges in 2024, the outlook for global steel demand over the next two years remains cautiously optimistic. From 2024 to 2026, global steel demand is expected to grow at an average rate of 1.3% annually. While the demand for steel in China’s residential property sector remains weak, there is hope that Western economies will gradually recover as looser monetary policies take effect and provide some relief to industrial and residential sectors. Steel demand is forecast to rise in South and Southeast Asia, particularly in India, as well as in the Middle East and North America, which should drive global growth.
Steel production, on the other hand, is expected to show no growth in 2024, reflecting the ongoing demand challenges. However, global production is expected to recover over the next two years, with a projected increase of 0.9% in 2025 and 1.3% in 2026. A key factor in this recovery will be the ramp-up of new steelmaking capacity in various parts of the world, including Asia, North America, Europe, and the Middle East. Large-scale steel projects are already underway, and these new facilities should help drive up production once they are operational. These additions will be crucial in supporting the supply side of the market, helping to meet growing demand in specific regions.
However, there is a major concern on the horizon: excess capacity in the steel sector. Strong growth in global steelmaking capacity has not been matched by equally strong demand. This mismatch has led to rising excess capacity, which is becoming a growing concern for industry stakeholders. In 2023, global crude steelmaking capacity exceeded steel production by over 500 million metric tons. This situation has led to the increasing recognition that excess capacity is becoming a significant problem for the global steel industry, and that it could become more pressing in the coming years, especially if the recovery in demand is slower than expected.
China’s Steel Production: Declining Output Amid Economic Slowdown
China, the largest producer of steel globally, has experienced significant struggles in 2024. Steel production in China is expected to fall by 1.8% in 2024, marking a continued decline in output from previous years. This drop in production is largely attributed to the ongoing downturn in China’s residential property market, which has severely impacted the construction sector and overall steel demand. The government’s efforts to stimulate the economy have had limited success in reversing the decline in steel demand, with trade sanctions and tariffs on Chinese exports further complicating the situation.
To mitigate the effects of the domestic downturn, China has increasingly turned to steel exports to sustain its steel sector. However, the rise in exports, especially in the form of cheap steel, has led to growing trade tensions. Many countries have imposed anti-dumping duties and other trade restrictions on Chinese steel products, potentially limiting China’s ability to rely on exports for market support in the coming years.
As a result of these factors, Chinese steel demand is expected to continue to fall by about 0.5% annually until 2026. This downward trend in demand is largely due to the lasting effects of the property market crisis, which is expected to persist for the foreseeable future.
India’s Steel Production Growth Amid Strong Domestic Demand
While China faces a decline in steel production, India is seeing robust growth in steel output. India’s steel production grew by 5.9% year-on-year by September 2024, driven by strong domestic demand, particularly in infrastructure and manufacturing. The Indian government has ambitious plans to significantly expand the country’s steelmaking capacity. By the end of the decade, India aims to increase its steel production capacity from around 150 Mt in 2024 to 300 Mt by 2030, making it a crucial player in the global steel market.
India’s growth trajectory is supported by substantial investments in infrastructure and industrial sectors, which are expected to drive the demand for steel in the years ahead. As the country focuses on improving its manufacturing base and modernizing its infrastructure, steel demand will likely continue to rise, providing significant support for the Indian steel industry.
European and Japanese Steel Markets: Struggling But Showing Signs of Recovery
In Europe, the steel market remains under pressure, particularly in countries such as Germany, where weak manufacturing and construction sectors continue to dampen steel demand. Despite these challenges, European steel production is projected to rise by a modest 1.6% in 2024, recovering slightly from previous declines. This recovery is expected to be gradual, as industrial and construction activities in Europe slowly stabilize, aided by policy support and improving economic conditions in the region.
In Japan, steel production saw a year-on-year decline of 5.8% by September 2024. The fall was largely due to reduced demand from the automobile sector. However, there are signs of improvement, as building construction orders increased slightly. This suggests that the Japanese steel industry may experience a recovery in 2025, driven by demand from the construction sector.
South Korea, similarly, has faced declines in steel production, with a 4.6% drop in output by September 2024. The weakening shipbuilding orders and challenges in the construction sector have weighed on South Korea’s steel industry. However, both Japanese and South Korean steel markets are expected to remain relatively stable over the outlook period to 2026, with modest growth anticipated as economic conditions improve.
U.S. Steel Production: Short-Term Decline, Longer-Term Growth
In the U.S., steel production is expected to fall by 1.2% in 2024. However, there is optimism for recovery in the following years. Steel production in the U.S. is projected to grow by 2.0% annually over the period from 2025 to 2026. This growth will be supported by recovering industrial demand, particularly in sectors like automotive, manufacturing, and construction.
Global Steel Demand Overview
The global steel market is expected to show a mix of stability and moderate growth over the coming years, with some regions experiencing declines while others see growth. The overall world steel demand in 2024 is forecasted to fall slightly by 0.8% to 1,866 million metric tons, primarily due to a decrease in consumption in China, the world’s largest steel consumer. However, the demand is set to rebound with moderate increases in 2025 and 2026, growing by 1.3% each year to reach 1,890 million metric tons in 2025 and 1,914 million metric tons in 2026.
China’s Steel Demand and Production Decline
China continues to be a major player in global steel demand and production but is expected to face a further decline in demand for the second consecutive year. In 2024, China's demand is expected to fall by 3.1% to 903 million metric tons. In 2025 and 2026, demand will continue its downward trend, shrinking by 0.5% annually, reaching 898 million metric tons in 2025 and 893 Mt in 2026. Despite this, China’s steel production is projected to decrease by 1.8% in 2024, totaling 1,000 million metric tons, before stabilizing further at 986 Mt in 2025 and 983 million metric tons in 2026.
India’s Growing Steel Demand and Production
India, on the other hand, is seeing a remarkable growth in steel demand, projected to rise by 7% in 2024, reaching 152 million metric tons. The demand will continue its upward trajectory, growing by 5.9% in 2025 to 161 million metric tons, and a slightly slower pace of 4.9% in 2026, reaching 168 million metric tons. India’s steel production follows a similar trend, increasing by 6.6% in 2024 to 150 million metric tons, and will grow by 6.2% in 2025 to 159 million metric tons, with a further increase of 5.7% in 2026, reaching 168 million metric tons.
European Union’s Moderate Steel Growth
The European Union is expected to see steady growth in both demand and production. Steel demand in the EU is projected to grow by 1.4% in 2024, reaching 142 million metric tons, and continue rising at a pace of 2.4% in 2025 to 145 million metric tons, followed by 2.0% growth in 2026, reaching 148 million metric tons. Steel production in the EU will see a similar upward trend, with a 1.6% increase in 2024 to 128 million metric tons, 1.5% growth in 2025, and a 2.8% increase in 2026 to 134 million metric tons.
United States: Slight Decline with Recovery in Production
The United States will see a slight decline in steel demand by 0.4% in 2024, to 100 million metric tons, but is expected to recover in 2025 and 2026. Steel demand in the US will rise by 1.8% in 2025 and by 2.6% in 2026, reaching 102 million metric tons and 105 million metric tons, respectively. US steel production, however, is projected to decline by 1.2% in 2024 to 80 million metric tons but will grow by 1.8% in 2025 and 2.1% in 2026, reaching 82 million metric tons and 84 million metric tons, respectively.
Growth in Steel Demand and Production in Other Asia
Other Asia, which includes countries such as Indonesia, Vietnam, and Thailand, is set to see strong growth in both steel demand and production, as these nations continue to expand their industrial and infrastructure sectors. Steel demand in this region is expected to grow by 3.2% in 2024, reaching 114 million metric tons, and by 3.9% in 2025 to 118 million metric tons, with 4.6% growth in 2026 to 124 million metric tons. Steel production will also rise, with a significant 15.9% increase in 2024 to 73 million metric tons, followed by 11.8% growth in 2025 to 82 million metric tons, and 4.9% growth in 2026 to 86 million metric tons.
Japan’s Declining Steel Demand and Production
Japan is facing a minor decline in steel demand in 2024, with a reduction of 1.3%, dropping to 58 million metric tons. The demand is expected to remain relatively stable over the following years, with a slight recovery of 1.1% in 2025 and a marginal decline of 0.1% in 2026. Steel production in Japan is projected to decline by 2.3% in 2024 to 85 million metric tons but will see a slight increase of 0.9% in 2025 to 86 million metric tons, with production expected to hold steady at 86 million metric tons in 2026.
South Korea’s Steel Demand and Production Trends
South Korea is expected to see a decline in steel demand by 3.9% in 2024, totaling 55 million metric tons, but this is expected to recover with growth of 2.9% in 2025 and 2.0% in 2026, reaching 56 million metric tons and 57 million metric tons, respectively. South Korean steel production will follow a similar pattern, with a 2.7% decline in 2024 to 65 million metric tons, followed by growth of 1.6% in 2025 to 66 million metric tons and 1.7% growth in 2026 to 67 million metric tons.
Russia’s Declining Steel Demand and Production
Russia is anticipated to experience a decline in both steel demand and production over the forecast period. Steel demand is expected to remain relatively flat, with a slight decrease of 0.8% in 2024 to 47 million metric tons. Production is also expected to drop by 5.2% in 2024, totaling 72 million metric tons, and continue declining gradually in the following years, with 1.9% and 1.6% reductions in 2025 and 2026, reaching 71 million metric tons and 70 million metric tons, respectively.
Middle East: Growth in Steel Demand and Production
The Middle East continues to see growing demand for steel, driven by infrastructure development and economic expansion. Steel demand in the Middle East is projected to grow by 4.4% in 2024 to 61 million metric tons, with growth slowing to 3.7% in 2025 and 3.2% in 2026, reaching 63 million metric tons and 65 million metric tons, respectively. Steel production in the region will follow a similar growth pattern, rising by 3.7% in 2024 to 61 million metric tons, and continuing to grow by 3.2% in 2025 and 2.6% in 2026 to 63 million metric tons and 65 million metric tons.
