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Commodity Market Report

Global Steel Strategic Planning Outlook – Q1 2023

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01 April 2023

Global Steel Strategic Planning Outlook – Q1 2023

Report summary

Steel will witness a tale of two halves in 2023 as the macro headwinds are still at play. We expect the H2 2023 to fare better as Chinese demand garners momentum, inflation and credit policy eases, and supply chain pressures retract. Chinese consumption will inch towards recovery, led by a gradual rise in property investments, pent-up consumer spending and a robust infrastructure pipeline. We have revised our near-term outlook slightly downward as the government-led stimulus is weaning due to rising public debt and inflation-linked spending cuts. We believe energy and supply chain challenges will take time to resolve. Over the long term, China will be a major deterrent. Global growth will piggyback on strong demand momentum from emerging economies like India and Southeast Asia. The steel supply mix is in for an overhaul as decarbonisation initiatives intensify. A switch over to low-carbon steelmaking will elevate the production share of EAF from 27% in 2022 to 48% by 2050.

Table of contents

    • Asia and Americas to aid demand recovery in 2023
    • Demand growth to slow over the long term as China falters
    • Chinese output to edge up, India will continue to ride the momentum in 2023
    • India and Southeast Asia to be the torchbearers for long-term supply growth; Chinese output falls amid dwindling demand
    • Evolving decarbonisation initiatives to alter the steelmaking landscape
    • Demand
    • Steel demand in 2022 declined 3% year-on-year due to a sluggish property sector
    • Demand to improve marginally in 2023, led by the construction sector
    • Weakening demographics to reduce long-term steel demand
    • Carbon taxes’ (including CBAM) implications on China’s steel industry
    • Supply
    • Crude steel production to edge up in 2023
    • EAF share continues to grow for decarbonisation in the medium term
    • H-DRI will ramp up in the long term but BF-BOF to remain dominant
    • Demand
    • Supply
    • Resurgence of exports to boost steel production by 10% in 2023
    • Indian steel capacity to boom in the next decade
    • BOF to remain dominant steelmaking technology in the long term
    • Steel demand to recover from macro jolts. Near-term outlook to stay muted.
    • Long-term prospects remain weak
    • Capacity restructuring seems inevitable
    • Supply to follow in demand footsteps
    • South Korean demand to outperform Japan in the near term
    • Automobile and shipbuilding to lead in the medium term
    • Growth to falter over the long term
    • Steel consumption stayed flat in 2022; to rebound 4% in 2023
    • Long-term prospects remain bullish on solid fundamentals
    • Infrastructure to be a key growth determinant
    • Housing and automotive production will support consumption
    • Rise in BOF output will support hot metal; decarbonisation initiatives to accelerate post 2035
    • Macroeconomic outlook
    • Russia/Ukraine war crippled European demand in 2022
    • Switch to electric vehicles to surpass long term auto demand
    • Green infrastructure to boost steel demand from construction sector
    • Trade diversification following Russian sanctions
    • EAF to become dominant production technology in 2030s
    • CBAM and ETS to drive up long-term carbon prices
    • European long-term production strategies
    • Earthquake recovery to boost medium-term steel demand
    • Production to trend lower amid plant closures and global macro headwinds
    • Exports to stay restricted amid rising domestic consumption
    • Positive long-term outlook
    • DEMAND
    • Steel demand in 2022 fared better than anticipated despite the war-led disruptions
    • Sanctions to bite and keep steel demand under pressure
    • Supply to feel pressure until exports remain restricted; long term growth pegged at 1% by 2050
    • DEMAND
    • Bleak demand outlook for the next few years before reconstruction demand surge kicks in
    • Exports to struggle in the near term, long-term growth will be healthy
    • Steel demand shot up in 2022 post a feeble few years, with modest growth expected in 2023.
    • Iran to exceed 55Mt steel capacity target by 2025, continue to lead in long term
    • Iranian growth slowed due to persistent power shortage issues
    • Supply-side issues to haunt steel mills in the near term
    • A raft of construction investments come to the aid of steelmakers
  • North Africa
    • Demand rebounds post lifting of construction ban
    • Steel production aided by import safeguards
    • Demand to remain subdued
    • Steel production to rise, deterring imports
  • MENA: Metallics Demand
    • After IIJA and IRA, construction to grow at a lethargic pace
    • Automotive’s (steel) calvary to begin around 2030; machinery to modestly grow
    • EAF’s dominance to expand
    • Metallics demand: the rise of DRI
  • Mexico and Canada
    • Iron Ore
    • Coal
    • Scrap
    • Russia/Ukraine war caused global steel price upheaval in 2022
    • Steel prices to normalise, steered by raw material price trends
    • Steel price forecast
    • Scrap demand and prices

Tables and charts

This report includes 71 images and tables including:

  • Demand growth by region
  • Global steel production outlook: EAF share to rise
  • Regional steel production outlook (2022-2050)
  • Japanese steel demand on a decline
  • Japan’s steel capacity to shrink by 20% by 2050
  • South Korean steel demand to saturate
  • South Korean capacity to witness a slight uptick
  • Southeast Asia: Demand outlook by country
  • Middle East: steel consumption outlook
  • North Africa: steel consumption outlook
  • Rising steel output to elevate operating rates
  • DRI production to rise 1.6% annually till 2050
  • Scrap demand to triple by 2050
  • Canada's finished steel consumption
  • Mexico's Car industry and Construction sector
  • Brazil production and demand recovery
  • Global average crude steel production costs
  • Decarbonisation outlook
  • Steel demand in negative growth yet on a rising trajectory throughout 2022
  • Demand to rebound in 2023; construction decline to drag on demand after that
  • Falling birth rate and contracting employed population suggest weak demographics
  • Urbanisation to drop significantly between 2021-2025
  • Steel demand outlook (2021-2050)
  • Overall steel production by technology
  • Hydrogen steelmaking in China
  • Capital expenditure
  • Steel demand outlook (Mt)
  • Per capita consumption (kgs)
  • Crude steel capacity outlook (Mt)
  • Metallics demand outlook (Mt)
  • Steel production outlook (Mt)
  • Steel supply mix is in for an overhaul
  • Hydrogen-based steel production outlook
  • Crude steel production: EAF to gain prominence
  • Hydrogen-based steel production outlook
  • Emission targets
  • Key infrastructure projects
  • BF-BOF capacity on a rise
  • Finished steel imports as % of demand to decline
  • Hot metal production to gain momentum
  • Hydrogen-based steel production outlook
  • EU27+UK steel demand by industry to 2050 (million tonnes)
  • EU27+UK production and trade outlook to 2050
  • Outlook of steel production by technology
  • Outlook of EU27+UK Metallics demand
  • Hydrogen-based DRI EAF production forecast to 2050
  • European steelmaking strategies illustration
  • Turkish steel mills capacity
  • Demand-supply outlook (Mt)
  • Export outlook (Mt)
  • Demand outlook (Mt)
  • Production and export outlook (Mt)
  • Iran will lead the capacity surge
  • Utilisation falls as production fails to catchup
  • Steel output to rise 2% annually till 2050
  • Utilisation levels to improve over the long term
  • US demand by sector
  • US trade and production
  • Average EAF burden mix
  • EAF vs BF-BOF share in total steelmaking
  • China hot rolled coil price and cost
  • Europe hot rolled coil price and cost
  • China rebar price and cost
  • Europe rebar price and cost
  • US hot rolled coil price and cost
  • US rebar price and cost
  • HRC price forecast
  • Rebar price forecast
  • Scrap price forecast
  • Metallics price forecast

What's included

This report contains:

  • Document

    Global Steel Strategic Planning Outlook – Q1 2023

    PDF 3.13 MB