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Steel Prices to Stay High Through 2026, India to Drive 2027 Demand Surge

Global steel demand is projected to see minimal growth of just 0.3% in 2026, with China acting as a major drag. India stands out as the key exception, expected to see robust growth of over 7% in 2026 and 9% in 2027, driving the eventual recovery. Despite weak consumption fundamentals, steel prices have rallied sharply, supported by higher raw material costs and geopolitical factors. Market volatility is expected to persist through 2026 due to ongoing freight and supply chain pressures.

Key Points: Steel Demand Weak Until 2026, India to Lead 2027 Rebound

  • Weak global demand with only 0.3% growth in 2026
  • India is the key bright spot for steel consumption
  • Steel prices rallying despite soft demand
  • Input costs like iron ore supporting higher prices
  • Geopolitics and freight to drive 2026 volatility
3 min read

Steel to stay costly through 2026, India to lead demand rebound in 2027: Report

Global steel demand growth just 0.3% in 2026, with strong recovery in 2027 led by India's 9.2% growth, says Centrum report.

"India is expected to outperform with growth of 7.4 per cent in CY26 and 9.2 per cent in CY27 - Centrum Report"

New Delhi, April 16

Global steel demand is likely to remain weak in the near term as the World Steel Association sees growth of just 0.3 per cent in 2026, with a stronger recovery only coming in 2027, according to a report by Centrum. China remains the main drag on demand, while India stands out as the bright spot, the brokerage noted

Despite soft demand, steel prices have jumped across major markets. For raw materials, iron ore and non-coking coal have moved up, but coking coal slipped from last month. Among non-ferrous metals, aluminium is still the top performer with prices holding firm, while other metals like copper, zinc, and nickel saw small dips, the report said.

The report suggests that the drag is mainly China, where demand is "likely to decline by 1.5 per cent YoY in CY26 and remain flat YoY in CY27." India is the key outlier. Centrum notes India "is expected to outperform with growth of 7.4 per cent in CY26 and 9.2 per cent in CY27," making it the main bright spot for steel consumption.

In February, the global crude steel output was 141.8mn tonnes, down 2 per cent year on year and a decline of 4 per cent over January. China produced 76.1mn tonnes, down 4 per cent on year, while India stood at 13.6mn tonnes, up 7 per cent on year but down 10 per cent on a month on month basis.

Despite weak demand, steel prices rallied sharply in March 2026. China's export hot rolled coil (HRC) rose 2 per cent month-on-month. Domestic prices were even stronger with HRC up 6 per cent MoM and 12 per cent YoY, and primary rebar up 2 per cent MoM and 8 per cent YoY.

Centrum said "steady order bookings, higher raw material prices, lower imports and increased purchases by traders to hedge against volatility and disruptions amid ongoing US-Iran conflict" drove the move. Prices have risen further since then, with HRC and rebar up Rs 2,400/tonne and Rs 660/tonne vs March averages. Stainless steel 304 grade also strengthened, up ~8 per cent MoM and 17 per cent YoY in February.

The report said input costs are supporting steel prices. Iron ore rebounded in March, with Australian ore up 6 per cent MoM and 4 per cent YoY. Domestically, NMDC hiked lump prices by Rs 500/tonne and fines by Rs 450/tonne in April. Centrum "expects near-term support for iron ore prices, driven by elevated fuel costs impacting mining economics."

Coal was mixed. Australian coking coal fell 8 per cent MoM but was still up 30 per cent YoY, due to better supply and high freight costs limiting buying. South African non-coking coal jumped 14 per cent MoM and 21 per cent YoY on freight and supply concerns.

Aluminium "continues to outperform with strong price trend." LME aluminium rose 10 per cent MoM and 27 per cent YoY to USD 3,373/tonne in March, and is now at USD 3,619/tonne. China's alumina prices also rebounded 5 per cent MoM after six months of decline. Global aluminium output was 5.7mn tonnes in February, up 1 per cent YoY but down 10 per cent MoM.

Other base metals softened during February. Zinc was down 4 per cent MoM, copper 3 per cent, lead 2 per cent, and nickel 1 per cent.

The brokerage further added that for the rest of 2026, volatility is expected in the market due to geopolitics and freight costs.

- ANI

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Reader Comments

S
Sarah B
The volatility due to geopolitics and freight costs is concerning. The US-Iran conflict mention is a reminder of how global instability hits our pockets. Hope our policymakers have a strategy to shield our growth story from these external shocks. 🇮🇳
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Vikram M
Expected growth of 7.4% and 9.2% for India is fantastic! It reflects the work on highways, metros, and industrial corridors. However, the report says prices are up due to higher raw material costs. Need to ensure this doesn't slow down the very projects driving demand.
R
Rohit P
As someone in the construction business, this is a mixed bag. Good for long-term planning knowing demand will be strong, but managing costs for the next two years will be a headache. The rise in rebar and HRC prices directly impacts our project budgets.
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Priya S
Interesting to see aluminium consistently performing well. With the push for EVs and green energy, this makes sense. Hope Indian manufacturers are positioned to benefit from this trend and not just be importers of costly metal.
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Michael C
While it's great that India is the "bright spot," the report highlights a core issue: prices are rising despite weak global demand. This isn't healthy growth; it's cost-push inflation. The authorities need to examine if there's speculative trading or cartelization driving domestic prices up.

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