Global Steel Market: Elevated Prices to Persist Through 2026, India to Lead Demand Recovery

The global steel industry is experiencing a period of weak demand, with the World Steel Association predicting a mere 0.3% growth in 2026. However, a stronger recovery is expected in 2027, driven largely by India's growing steel consumption. According to a report by Centrum, China remains the primary drag on demand, whereas India stands out as a bright spot, with expected growth of 7.4% in 2026 and 9.2% in 2027.

Despite the soft demand, steel prices have witnessed a significant jump across major markets. The prices of raw materials, such as iron ore and non-coking coal, have risen, while coking coal prices have slipped. Among non-ferrous metals, aluminum continues to be the top performer, with prices holding firm, while metals like copper, zinc, and nickel have experienced minor dips. The report attributes the price surge to steady order bookings, higher raw material prices, lower imports, and increased purchases by traders to hedge against volatility and disruptions amid the ongoing US-Iran conflict.

In February 2026, global crude steel output stood at 141.8 million tonnes, down 2% year-over-year and 4% month-over-month. China, the world's largest steel producer, saw a 4% decline in production, while India's output rose 7% year-over-year, despite a 10% drop month-over-month. The Indian steel industry's growth can be attributed to the government's initiatives to boost infrastructure development, leading to increased demand for steel.

Steel prices have continued to rally, with China's export hot-rolled coil (HRC) rising 2% month-over-month and domestic prices surging 6% month-over-month and 12% year-over-year. The prices of primary rebar have also increased, up 2% month-over-month and 8% year-over-year. The report notes that input costs, such as iron ore and coal, are supporting steel prices, with Australian iron ore prices rebounding 6% month-over-month and 4% year-over-year.

The global aluminum market has also witnessed a strong price trend, with LME aluminum rising 10% month-over-month and 27% year-over-year to $3,373 per tonne in March. China's alumina prices have also rebounded 5% month-over-month, after six months of decline. The report predicts that volatility is expected to persist in the market for the rest of 2026, driven by geopolitical tensions and freight costs.

Other base metals, such as zinc, copper, lead, and nickel, have experienced a decline in prices during February. Zinc prices dropped 4% month-over-month, while copper, lead, and nickel fell 3%, 2%, and 1%, respectively. The report highlights that India's growing steel demand, coupled with the government's efforts to boost infrastructure development, is expected to drive the recovery of the global steel market in 2027.

In conclusion, the global steel market is expected to experience elevated prices through 2026, driven by India's growing demand and supported by input costs. As the industry navigates through the challenges of weak demand and geopolitical tensions, India is poised to emerge as a key driver of the steel market's recovery in 2027.