Rising trade barriers, excess capacity and higher energy costs are weighing on the global steel industry, while demand in India and the Gulf Cooperation Council (GCC) countries could provide room for growth. Participants discussed the outlook at the 19th Arab Steel Summit, held in Cairo on November 3–4.
Alia El-Mahdy, former dean of Cairo University’s Faculty of Economics and Political Science, said countries are increasingly using safeguards, antidumping duties and environmental requirements, including the EU’s Carbon Border Adjustment Mechanism (CBAM). Global steel capacity remains structurally excessive: the average capacity utilization rate in the world’s 10 largest producing countries was about 70.7% in 2025.
El-Mahdy also pointed to pressure from rising energy and raw material costs. She identified low-emission steelmaking, product diversification and digitalization as opportunities, alongside improving capacity utilization and investing in advanced technologies.
Veysel Yayan, secretary general of the Turkish Steel Producers Association, linked market imbalances to China’s rapid production growth and rising protectionism. He said Turkey’s steel exports to the EU had fallen from around 7 million mt to 2.8 million mt amid US tariffs and restrictive EU import quotas. Yayan called for international cooperation and a rules-based trading system.
Industry consultant Mohamed Aljabr, citing worldsteel’s October forecast, said Indian steel demand could rise 7.9% in 2026 and 8% in 2027, supported by infrastructure investment and industrial development. Demand in the GCC is expected to fall by about 11% in 2026 because of regional tensions. However, many investment projects have been postponed rather than canceled; Aljabr forecast an 11.3% rebound in demand in 2027.
Sunil Seepana, a senior analyst at CRU, also identified India and Southeast Asia as the main drivers of global demand growth through 2031. In China, steel demand is forecast to decline from about 927 million mt in 2026 to 875 million mt in 2031, reflecting continued weakness in construction. Seepana said expanding capacity in importing countries and new trade barriers would constrain Chinese exports.
Seepana added that energy costs and carbon intensity are playing an increasingly important role in producers’ competitiveness. According to CRU analysis, a 50% increase in energy costs will raise production costs, with electric arc furnace producers particularly exposed to price fluctuations. Producers in the Middle East and North Africa benefit from relatively low emissions intensity because they rely on natural gas, but Chinese investment in cleaner technologies could intensify competition in low-emission steel markets.
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