The global steel industry is preparing for a more stable period following a challenging year. Demand worldwide is expected to rise in 2025, driven primarily by recoveries in Europe and the US. In Turkey, profit margins are predicted to improve in the upcoming year.
Fitch Ratings has classified the global steel sector outlook for 2025 as "neutral." The agency anticipates a modest recovery in the sector after a weak 2024, due to a more balanced steel market in China, declining costs and prices, and a slight increase in producer margins.
China's Production to Decline
According to Fitch's report, the overall outlook for the steel market in the new year is as follows:
Global steel consumption is expected to grow by low single digits in 2025, supported by steady demand from India and China and recoveries in the US and the EU.
Steel production in China will continue to decline by low single digits in 2025, with demand remaining almost flat.
Improved Margins in Turkey, Brazil, and Europe
Margins are projected to improve in Turkey, Brazil, Europe, and India, as these countries benefit from reduced Chinese exports.
India is expected to remain a key growth market for steel, with both production and consumption increasing.
Brazil's market is set to recover as imports decline, and demand growth remains positive.
The European market will see a modest recovery after years of contraction.
In the US, factory profitability will continue to normalize, with margins staying healthy.
US Tariffs to Have Regional Effects
Potential trade measures from the US administration and growing trade protectionism elsewhere are expected to negatively impact the global economy, with varying regional effects. A major tariff increase on Chinese goods by the US could affect steel consumption in China and create a ripple effect in global markets.
China's Steel Demand to Fall by 1.5%
The China Metallurgical Industry Planning Research Institute (MPI) estimates that steel demand in China will decrease by 1.5% in 2025 compared to 2024. Steel production is expected to fall by 4.4% year-on-year in 2024. Steel consumption in China is projected to reach 863 million tons in 2024 and 850 million tons in 2025. Between January and November 2024, China's steel production dropped by 2.7% year-on-year, totaling 929.19 million tons. This figure is expected to fall by 2% in 2024. In November, steel production decreased by 4.3% compared to October, but rose by 2.5% compared to November 2023, reaching 78.4 million tons.
Exports Expected to Increase by 23%
China's steel exports are projected to exceed 111 million tons in 2024, surpassing the 2015 record of 110 million tons. This represents a 23% year-on-year increase. The sharp rise in exports is mainly driven by a weakened domestic market due to economic challenges and a slowdown in the construction sector.
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