Steel prices worldwide are expected to stay low in 2024, even with a slight bounce in Chinese steel rates towards the end of 2023. The primary reason of this for this development is that steel prices are down especially in big markets outside of China as noted by research agency BMI, a subsidiary of Fitch Solutions. “The lower demand from construction and manufacturing and ongoing challenges in China’s property sector drove the global steel demand at the weaker side” according to the December Resources and Energy quarterly report from the Australian Office of the Chief Economist

Forecasted Price Cut

Various economic factors like tight financial conditions, rising inflation, and the ongoing Ukraine War, are predicted to impact the economic growth of developed nations. According to BMI “this may further influence the European Union’s economic outlook, potentially affecting steel demand and prices.”

The BMI has revised its global steel prices forecast and downgraded from $780/Tonne to $740 / Tonne. expecting a marginal improvement in prices in the coming months but starting the year at a lower baseline.

“The New data from China Iron and Steel Association (CISA) indicating a rise in steel inventories at major Chinese mills to 14.1 million tonnes in December, it shows an 8.8 % increase as compared to late November.” According to ING Think, the economic and financial analysis arm of Dutch multinational financial service firm ING. The Australian Office of the Chief Economist expresses uncertainty about the extent to which the Chinese Government will enforce restrictions on steel production levels in the final weeks of 2023.

“Until now, the government has not strictly enforced production cuts, prioritizing economic growth. However, there is an anticipation of a slowdown in Chinese steel output,” the statement mentioned.

Output Recovery

BMI has observed signs of improvement in global production. The Australian Office of the Chief Economist predicts that a stabilizing and gradual increase in global industrial production, along with additional stimulus-driven infrastructure projects, will contribute to robust growth in steel demand throughout 2024.

BMI anticipates enhanced production growth on the supply side, driven by Chinese steel mills, while other key markets are expected to witness production recovery. “On the demand side, support for prices is expected through China’s exports and domestic consumption growth in the automotive sector, coupled with India’s sustained demand strength,” according to BMI.

Indian Scenario Stable

The situation in India is stable. However, in the United States, construction activity and the associated demand for steel are facing notable challenges due to rising interest rates, along with elevated land and material costs, as mentioned.

In 2024, global steel prices face uncertainty, influenced by factors like economic growth challenges, inflation, and the Ukraine War. However, signs of recovery emerge, with global industrial production stabilizing. In India, steel demand remains stable, driven by manufacturing and construction sectors. Stay updated on steel price news, cold-rolled sheet prices, and steel prices charts in India for informed decision-making.