en.Wedoany.com Reported - Market research firm BMI has slightly lowered its 2026 global steel price forecast from $625 per metric ton to $620 per metric ton, citing a deterioration in the global macroeconomic outlook since March and weaker steel demand expectations outside China.

Affected by the US-Iran conflict, BMI's macro team has revised down its 2026 global growth forecast from 2.8% before the conflict to 2.4%.

In China, as authorities impose controls on excess steel capacity, crude steel output is expected to decline by 4% this year to 922 million metric tons. Crude steel output in 2025 is estimated to have fallen by 4.4% to 960 million metric tons, marking the first time since 2019 that China's steel output has dropped below 1 billion metric tons.

China's official manufacturing Purchasing Managers' Index (PMI) remained stable or above the expansion threshold between March and May, but the new orders sub-index fell back into contraction territory in May, indicating that activity outperformed demand.

BMI noted that this combination suggests sustained pressure on industrial profit margins rather than a clear improvement in end-user demand.

BMI forecasts that global steel output will decline by 1% year-on-year in 2025 due to weaker production in China and Iran (affected by the US-Iran conflict).

However, steel output in emerging markets such as India, the world's second-largest crude steel producer, is expected to show robust growth.

Downside risks remain, with a deteriorating global industrial and economic outlook putting pressure on steel production, along with the 50% tariff imposed by the US on steel imports.

The firm stated that although the US and Iran have reached an agreement, the conflict since the beginning of the year has worsened the macroeconomic outlook for several steel-consuming markets. However, protectionism and policy support continue to underpin prices in parts of Europe and North America.

BMI expects global steel output to grow at a compound annual growth rate (CAGR) of 1% from 2026 to 2035, with global steel output excluding China projected to grow at a CAGR of 2.7%.

BMI believes that as steel intensity of GDP declines in large markets, output growth will gradually slow towards the end of the forecast period in 2035.

Global steel consumption is expected to grow by 0.4% year-on-year, with strong demand growth in India partially offsetting the downward pressure caused by the US-Iran conflict in other regions.

Meanwhile, global steel consumption remains weak, with the manufacturing sector continuing to drag on growth in major markets.

BMI stated that although steel intensity of GDP may decline in large markets, decarbonization, increased infrastructure investment in developed markets like the US, and robust growth in India could offset the peak in Chinese demand and the expected stagnation and decline after 2026.

Furthermore, the ongoing climate agenda for steel decarbonization will create opportunities for the steel industry as end markets shift towards green steel.

The agency noted that higher recycling rates and the adoption of new steelmaking technologies are expected to address the rise of electric vehicles and urbanization.

Over the longer term, BMI expects global steel prices to trend downward, driven by the maturation of China's construction cycle and its diminishing role as a marginal demand source, while increased steel usage in India and rising global defense spending will only partially offset this decline.

In its latest "Global Steel Overview" report, BMI forecasts that average steel prices will fall by 7.3% to $575 per metric ton in 2027, and by a further 4.3% to $550 per metric ton in 2028.

Steel output is expected to grow by 0.9% to 1.84 billion metric tons in 2027 and by 1.6% to 1.87 billion metric tons in 2028.

BMI forecasts that steel consumption will grow by 0.4% to 1.82 billion metric tons in 2027 and by 0.9% to 1.84 billion metric tons in 2028.

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