Fitch Ratings expects a modest recovery in the global steel market in 2026, maintaining a neutral sector outlook as lower steel consumption in China is offset by rebounding demand elsewhere. Easing monetary policy, continued infrastructure investment, and a recovery in construction activity are expected to support the market. Key risks include geopolitical uncertainties, weak manufacturing segments, and ongoing trade tensions.

China’s steel output is forecast to decline by 4.5% due to tighter production controls and higher trade barriers, reducing exports from 118 million tons in 2025 to 109 million tons in 2026. Margins for Chinese producers are expected to improve further, aided by efficiency gains and lower costs.

Growth in India will continue, supported by government infrastructure programs, urban housing, and industrial corridor development, although higher imports may pose a risk to domestic profitability. In Europe, tighter import quotas and a carbon tariff are expected to support margins.

In the US, steel producers should benefit from infrastructure legislation, improved demand, lower interest rates, and limited imports, as well as a recovery in construction and automotive demand. Brazil’s steel market is also expected to see modest gains from construction, agriculture, automotive sectors, and infrastructure spending.