After peaking at a record level in 2021, world steel demand has weakened over the last three years. A sharp decline in demand in the People’s Republic of China (“China”) largely offset solid steel demand growth in many emerging markets during 2024. In many advanced economies, steel producers experienced slowdowns due to weaker demand, economic uncertainty and high energy costs. As with demand, world steel production reached a record level in 2021, then generally declined through 2024. Growth of slightly less than 1% per year is expected for world steel demand and production through 2030. However, emerging markets, except for China, are expected to see a rebound, driven by infrastructure projects and government-led industrial growth. Steel prices trended lower in 2024, but the rate of decline has slowed, and prices seem to have stabilised recently at their lowest levels since 2021. Steel industry profitability margins are close to historic lows. Profitability is noticeably lower for steel firms in partner economies than for steel firms in OECD countries.
OECD Steel Outlook 2025
Abstract
Steel demand and production
Steel is one of the most versatile and widely used materials worldwide. Demand in recent years (as measured by apparent steel use in crude steel equivalent) has been close to 1.9 billion tonnes per year (Table 4.1). The largest single market is for steel used in construction (including infrastructure), which accounts for about 50% of total consumption. Still, hundreds of millions of tonnes are also used to manufacture many types of machinery, equipment and other metal products. Over time, the People’s Republic of China (hereafter “China”) has emerged as the world’s largest country market, accounting for approximately 50% of total demand; small changes in Chinese demand can thus have significant implications for world markets, particularly with respect to international trade flows and prices.
In mmt and % change
Source: World Steel Association (2024[1]), 2024 World Steel in Figures, https://worldsteel.org/wp-content/uploads/World-Steel-in-Figures-2024.pdf.
After peaking at a record level in 2021, steel demand eased during 2022-24. Monthly indicators suggest that many emerging markets experienced solid demand growth during 2024, but that was largely offset by a significant decline in demand in China and slow growth in developed markets.
Similar to demand, world crude steel production has been on a downward trend for several years (Table 4.2). World production reached a record level of 1 963 million metric tonnes (mmt) in 2021 but declined by 3.8% in 2022. A slight increase was recorded in 2023, but further weakening occurred in 2024 as global production declined 0.8%. The Asian region accounted for almost 75% of the world’s total steel production, with China alone accounting for over 50% of the total in recent years.
In mmt and % change
Source: World Steel Association (2024[2]), Steel Statistical Yearbook, https://worldsteel.org/wp-content/uploads/Steel-Statistical-Yearbook-2023.pdf.
Developments in steel prices
Flat steel and rebar prices have continued their downward trend that began in July 2021 but appear to have stabilised in early 2025. In February 2025, rebar and flat prices were 12% and 17% lower than one year earlier, respectively (Figure 4.1). This is 31% and 49% lower than their July 2021 peak. Although steel prices were historically elevated during 2021-22, it is noteworthy that steel prices in January 2025 were the lowest they had ever been since 2021.
The coefficients of variation (CV) in Panel B of Figure 4.1 indicate price dispersion across regions. Price dispersion fell significantly towards the end of 2024 as steel prices converged around the globe but started to increase again in 2025. Although wider price dispersion seems to be historically associated with future price increases, during the July 2024 increase in price dispersion, steel prices stayed flat and did not increase.
Flat steel prices B. Indicator of regional price dispersion
Note: The flat price and long steel price indices are defined as the arithmetic average of the individual regional Platts price series for the United States, North Europe, China, Japan and India, when available. The coefficients of variation (CV) are the ratio of the standard deviation of the regional Platts price series making up the indices to their mean, which captures price dispersion across regions.
Source: S&P Global Commodity Insights, ©2025 by S&P Global Inc.
In February 2025, regional flat prices ended up falling between 14% and 21% across all regions, year-on-year, except for Brazil, where the decline was smaller, at 7%. Although US prices have been more volatile than other regional prices, they are in line with other prices in terms of their downward trend, experiencing a 16% decrease in February 2025, year-on-year. Regional rebar prices have dropped between 9% and 15% across all regions. Overall, although price differences between regions remain elevated, the same dynamics seem to have affected all regional prices over the past year.
Steelmaking raw materials prices
The price of a typical basket of raw materials used for steelmaking1 decreased during 2024, essentially due to a large decline in the price of coking coal (Figure 4.2). In February 2025, prices were, year-on-year, 18% lower for iron ore, 44% lower for coking coal, and 19% lower for scrap.
In USD per tonne
Note: The iron ore price series is Platt’s “Forwards / SGX 62% Fe Iron Ore cash-settled swaps (dry metric tonne) / China import CFR Tianjin port USD /t”; the coking coal price series is LSEG’s “Premium Coking Coal Australia”; the scrap price series is Platts “Scrap / Shredded / N. Europe domestic delivered UDS /t”.
Source: S&P Global Commodity Insights, ©2025 by S&P Global Inc; LSEG (2025[3]), London Stock Exchange Group, www.lseg.com.
Consequently, the margin between steel and raw material prices, measured by the difference between the price of steel and the basket of raw materials, has recently been increasing (Figure 4.3).
Note: The last data point is February 2025. Prices used are as follows: Iron ore Fines, 62% Fe, spot, CFR China; Hard coking coal spot, FOB Australia; Scrap, shredded North Europe domestic price. The basket is compared against HRC world prices. The margin is defined as the percentage difference between the steel flat price and the raw materials basket price.
Source: OECD, based on data from S&P Global Commodity Insights, ©2025 by S&P Global Inc. and LSEG (2025[3]), London Stock Exchange Group, www.lseg.com.
As the price of raw materials has fallen quicker than the price of steel products, this will bring some breathing space to previously pressured profitability margins of steel producers.2
However, material costs, particularly energy costs, have not been uniform across countries. In 2023, electricity prices for energy-intensive industries in the European Union, for example, were nearly double those in the United States and China (IEA, 2024[5]), which were already more elevated than in many other regions. The increasing production expenses in Europe put downward pressure on steel producers, manufacturing activity and, consequently, steel demand. In contrast, economies with more stable or lower energy prices, like those in Asia, have continued to maintain a more favourable environment for their steel industries.
High energy prices in the European Union have fuelled higher inflation, which in turn prompted the European Central Bank to raise interest rates (European Central Bank, 2024[6]). These elevated interest rates have significantly dampened demand in steel-intensive sectors such as construction and automotive, as higher borrowing costs made it more expensive to finance new projects. While energy prices have since moderated in 2024, interest rates have remained elevated for an extended period, prolonging the negative impact on demand.
Financial situation in the steel industry
Profitability of a representative sample of steelmakers fell significantly in 2022, as the speculative price swings observed during the pandemic dissipated and then continued to weaken in 2023 for the median firm (Figure 4.4). Indicators of profitability suggest that margins may have declined further in 2024 for the median steel company to levels that are not seen as sustainable for many firms. Profitability is also noticeably lower for steel firms in partner economies than for steel firms in OECD countries, both in terms of gross profit ratios and in terms of earnings before interest, taxes, depreciation, and amortisation (EBITDA) over total sales.
Note: Operating profitability is defined as EBITDA (earnings before interest, taxes, depreciation, and amortisation) to sales revenue in percentage. The dotted lines provide information on the distribution (first and third quartiles) of the represented values across the firms in the sample: 25% of the companies have a value below (respectively, above) the first (respectively, third) quartile line. The continuous line provides information on median values for firms in the sample: those lines divide the distribution into two halves, with 50% of the companies having operating profitability below the line.
Source: OECD Manufacturing Groups and Industrial Corporation (MAGIC) database.
Data until 2022 show that capacity utilisation in partner economies has not fallen in line with declining profits, which had been the case in 2008-2009. Contrary to the steel firms in OECD countries, capacity utilisation has risen in partner economies despite the declining profit levels (Figure 4.5).
Source: OECD Steel Secretariat and worldsteel
Steel firms in partner economies remain much more indebted than in OECD countries (Figure 4.6). The 25% least indebted firms in partner economies (the lower quartile of steel firms in partner economies) are higher than the 25% most indebted firms in OECD countries. As of 2023, the debt-to-asset ratio of steel firms in partner economies had a median of 35%, compared to 21% for steel firms in OECD countries.
Note: Indebtedness is computed as the debt-to-asset ratio; the total liabilities-to-debt ratio would paint a similar picture.
Source: OECD Manufacturing Groups and Industrial Corporation (MAGIC) database.
The sample of firms used in this section is not restricted to publicly listed steel companies and thus presents a relatively accurate picture of indebtedness levels. Nevertheless, some caution is warranted as, in some large steel-producing economies, such as in China, debt has been artificially reduced by relying extensively on debt-for-equity swap schemes that were not agreed upon in advance by investors and lacked clarity concerning losses in cases of bankruptcy.
Steel demand
Some improvement in global steel demand is expected in 2025 following the contraction of 1.1% in 2024 (Table 4.3). Growth of 1% is expected for 2025, with the level of demand reaching 1 889 mmt in 2025, just slightly lower than 2023. This slight improvement reflects stronger demand prospects across OECD countries and a slower rate of decline in Chinese steel demand. Implementation of stimulus measures by the Chinese government could provide support to the property market there, thereby softening the negative impact of falling new residential investment. However, these stimulus policies are unlikely to be strong enough to reverse the recent decline in Chinese steel demand.
Developed markets, such as the European Union and the United States, are expected to see stronger recovery on the back of a more favourable environment for investment and consumption of durable goods, reflecting lower interest rates and less restrictive monetary policies.
In mmt and % change
Note: CAGR: Compound annual growth rate, 2025-30.
Source: OECD estimates of steel demand derived from its long-term steel demand model, taking into account the Short-Range Outlook published by the World Steel Association (https://worldsteel.org).
The medium-term outlook to 2030 foresees slow growth globally, with global steel demand reaching 1 957 mmt in 2030. While Chinese steel demand is expected to continue declining steadily, the rest of the world is expected to post steady annual growth on average. This projection is based on an expected slowdown in China’s gross domestic product (GDP) growth from around 5% in 2024 to 3.1% in 2030 (compound annual growth rate [CAGR] 3.8%).
The decline in the demand for Chinese steel reflects expected structural adjustments in the country’s growth model, which has been based on high investment rates and relatively low consumption. These structural adjustments in the economy will also reduce the steel intensity of GDP, as economic growth is increasingly driven by household consumption and less by steel-intensive fixed investment. Slower economic growth and the falling steel intensity of GDP are expected to keep Chinese steel demand on a declining path of 0.6% per year, on average, during 2025-30.
Conversely, additional sources of steel demand could come from emerging markets, especially from Asia, such as India and the Association of Southeast Asian Nations (ASEAN) region, which are expected to register strong demand growth, and, to a lesser extent, from the Commonwealth of Independent States, the Middle East and Africa. Steel demand growth in these markets is expected to be led by growing expenditure on infrastructure investment and housing.
Developed markets in Europe, North America (Canada, Mexico and the United States) and Asia are expected to experience modest growth. These are mature markets that will face more limited demand from infrastructure investment and housing.
Figure 4.7 combines the expected demand trajectory until 2027 with steelmaking capacity projections. It highlights that the global excess capacity gap could widen significantly, reaching 721 mmt by 2027.
Source: OECD desk research for capacity data and demand for OECD estimates of steel demand derived from its long-term steel demand model, taking into account the Short-Range Outlook published by the World Steel Association (https://worldsteel.org/).
In fact, current capacity levels would suffice to meet the expected growth in global steel demand for well over a decade into the future.
Steel production
In 2025, global steel production is projected to grow slightly, with a 0.7% increase compared to 2024. China’s steel production is expected to decline by 0.6% in 2025, which is a smaller decline compared to steel demand. As such, export pressures will remain high during the year. However, production in developed economies is expected to show positive growth of 1%, supported by the broad-based steel demand recovery. The European Union, the United Kingdom, North America, and developed Asia are expected to experience production growth of around 1%, which will result in a much better overall performance than in 2024.
Global steel production is expected to increase at an average annual rate of 0.9% over the medium term until 2030 (Table 4.4).
In mmt and % change
Note: CAGR: Compound annual growth rate, 2025-30.
Source: OECD estimates of steel production derived from its long-term steel demand model, taking into account recent production figures from the World Steel Association (https://worldsteel.org/).
The relatively slow growth is primarily due to the gradual decline in production in China, while other emerging markets and developing economies gradually expand their share of world steel production. Several factors will determine the pace of China’s production decline, including whether it can reduce excessive steelmaking capacity, particularly of blast furnace-based plants, to meet climate goals, the extent of the domestic steel demand downturn and how much surplus steel is exported to foreign markets, and whether the oversupply situation and the deterioration of the industry’s profitability will incentivise firms to adjust output downwards.
Steel production in the OECD will remain almost constant until 2030, which is in line with market demand fundamentals and given the very limited growth in capacity. In contrast, production growth in Africa, ASEAN, India and the Middle East will play an increasingly prominent role in future global steel production, supported by the ongoing rapid expansion in steelmaking capacity. Some emerging economies aim to be more self-sufficient in steel production and to be able to export steel in the future.
References
[6] European Central Bank (2024), We have cut interest rates. Why did we do it and what does that mean for you?, https://www.ecb.europa.eu/ecb-and-you/explainers/html/interest-rates-changes.en.html.
[5] IEA (2024), “Executive summary”, in Electricity 2024: Analysis and forecast to 2026, IEA Publications, Paris, https://www.iea.org/reports/electricity-2024/executive-summary.
[4] LSEG (n.d.), London Stock Exchange Group, https://www.lseg.com (accessed on 30 April 2025).
[7] OECD (2023), OECD Inter-Country Input-Output Database, http://oe.cd/icio (accessed on 16 February 2024).
[3] S&P Global (2025), Commodity Insights, https://www.spglobal.com/commodity-insights/en.
[1] World Steel Association (2024), 2024 World Steel in Figures, World Steel Association, Brussels, https://worldsteel.org/wp-content/uploads/World-Steel-in-Figures-2024.pdf.
[2] World Steel Association (2024), Steel Statistical Yearbook, World Steel Association, Brussels, https://worldsteel.org/wp-content/uploads/Steel-Statistical-Yearbook-2023.pdf.
← 1. The raw materials basket for steel production comprises iron ore, coking coal and scrap. Iron ore and coking coal are the main materials used in integrated steelmaking, while purchased scrap is used largely in electric arc furnaces.
← 2. A word of caution is nevertheless warranted when interpreting the price margin described here. First, it is not region-specific, thus, due to higher raw material and energy costs, some regions will have lower margins. Second, because it does not reflect appropriately all the costs (e.g. labour, capital and electricity costs) incurred by steel firms.
← 3. OECD projections are based on a new model that leverages the extended OECD Inter-Country Input Output (ICIO) database (OECD, 2023[7]) that considers the perspective of the whole steel global value chain, covering production and international trade flows from 76 countries and 45 industries, with the iron and steel industry as a separate sector. Long-term estimates are built upon OECD's long-term economic projections of GDP, GDP per capita, investment and other series up to 2060, while drawing on structural assumptions and considerations from OECD research.