Global steel demand recovery to remain weak as excess capacity crisis deepens
2026-06-05 11:33:54 [Print]
The Organization for Economic Co-operation and Development (OECD) has stated in its "Steel Outlook 2026" report that global steel demand is expected to recover only slightly in 2026 following four consecutive years of contraction. The continued slowdown in China's property sector is offsetting stronger growth in India, Southeast Asia, Africa, and some Middle Eastern markets, while the widening gap between steelmaking capacity and demand continues to deepen the structural crisis facing the global steel industry.
According to the OECD, global steel demand declined by an estimated 2.6% in 2025 to 1.80 billion metric tonnes and is forecast to rise by only 0.4% in 2026 to 1.81 billion tonnes. Demand is expected to reach 1.88 billion tonnes by 2030, corresponding to a compound annual growth rate of just 0.9% over the 2025-2030 period.
The OECD noted that China's steel demand fell by 6.9% in 2025 to 830.94 million tonnes and is expected to decline by a further 0.6% in 2026 to 826.22 million tonnes. Construction activity in the country remains subdued, despite the government's decision in January 2026 to abandon the "three red lines" borrowing policy that had previously restricted property developers' access to financing.
The organization stated that the policy change is unlikely to generate a rapid recovery in steel consumption, as buyer confidence remains weak and new home prices are still falling. China's steel demand is expected to continue its long-term decline and fall to 817.84 million tonnes by 2030.
The OECD stated that the weakness in demand is occurring while global steelmaking capacity continues to expand, creating a widening imbalance that is expected to keep capacity utilization rates at unsustainable levels and intensify financial pressure on producers.
According to the report, global steel excess capacity is estimated to have reached 640 million tonnes in 2025 and is projected to rise to 745 million tonnes by 2028. Demand is expected to increase by only 34 million tonnes during the 2026-2028 period, while capacity could expand by up to 139 million tonnes over the same timeframe.
According to the OECD, global steel demand declined by an estimated 2.6% in 2025 to 1.80 billion metric tonnes and is forecast to rise by only 0.4% in 2026 to 1.81 billion tonnes. Demand is expected to reach 1.88 billion tonnes by 2030, corresponding to a compound annual growth rate of just 0.9% over the 2025-2030 period.
The OECD noted that China's steel demand fell by 6.9% in 2025 to 830.94 million tonnes and is expected to decline by a further 0.6% in 2026 to 826.22 million tonnes. Construction activity in the country remains subdued, despite the government's decision in January 2026 to abandon the "three red lines" borrowing policy that had previously restricted property developers' access to financing.
The organization stated that the policy change is unlikely to generate a rapid recovery in steel consumption, as buyer confidence remains weak and new home prices are still falling. China's steel demand is expected to continue its long-term decline and fall to 817.84 million tonnes by 2030.
The OECD stated that the weakness in demand is occurring while global steelmaking capacity continues to expand, creating a widening imbalance that is expected to keep capacity utilization rates at unsustainable levels and intensify financial pressure on producers.
According to the report, global steel excess capacity is estimated to have reached 640 million tonnes in 2025 and is projected to rise to 745 million tonnes by 2028. Demand is expected to increase by only 34 million tonnes during the 2026-2028 period, while capacity could expand by up to 139 million tonnes over the same timeframe.
