Latest Updates on the Global Steel Industry – June 2024
The global steel industry faces mixed prospects as we approach the second half of 2024. Demand recovery remains uneven across regions, influenced by factors such as economic headwinds, geopolitical challenges, and advancements in sustainable production methods.
Global Demand Trends
According to the World Steel Association, global steel demand is expected to decline by 0.9% in 2024 but rebound modestly by 1.2% in 2025. This marks the third consecutive year of sluggish growth, primarily driven by China's economic slowdown and its struggling real estate sector. Steel demand in China is projected to drop by 3% this year, followed by a further 1% decline in 2025, reflecting reduced construction activity and lower consumer confidence.
However, India emerges as a beacon of hope for the sector. Driven by massive infrastructure investments, Indian steel demand is set to grow at a robust pace of 8% in 2024 and 2025. Similarly, emerging markets in Southeast Asia, the Middle East, and Africa are witnessing steady demand growth due to ongoing urbanization and large-scale development projects.
Production and Pricing Trends
Steel production globally remains volatile. In June 2024, rebar and hot-rolled coil (HRC) prices saw month-on-month declines in key markets like India, China, the USA, and the EU due to seasonal slowdowns, high inventories, and policy uncertainties. However, raw material costs like iron ore and coking coal remain a key factor impacting steel pricing dynamics, with fluctuations adding to market uncertainty.
In the USA, steel mills are grappling with falling scrap prices and weakened demand in housing construction, while European markets are entering a summer slowdown earlier than anticipated. China continues to face oversupply pressures, pushing domestic steel prices lower.
Sustainability and Green Steel
Environmental sustainability is reshaping the global steel industry. Leading economies like China aim to reduce energy consumption per tonne of steel by 2% by 2025 to meet carbon neutrality goals. Similarly, investments in green steel production—such as electric arc furnaces (EAFs) and hydrogen-based steelmaking—are gaining traction in Europe and North America.
Notably, Tata Steel Nederland is advancing its plans for a hydrogen-powered direct reduced iron (DRI) plant in Ijmuiden, aligning with the EU’s clean energy initiatives. Innovations in low-emission technologies are critical as the industry navigates stricter environmental regulations and growing consumer demand for eco-friendly materials.
Outlook for 2024-2025
Despite short-term challenges, the steel industry is poised for recovery through sustainable growth strategies, technological advancements, and demand resurgence in emerging economies. However, volatility in raw material pricing, trade policies, and geopolitical tensions will continue to influence the industry's trajectory.