Steel rebar futures move toward CNY 3,080 per ton, approaching two-month lows as a weaker global demand outlook weighs on the market. The World Steel Association has revised its forecast, now projecting global steel demand to contract by 0.1% in 2026, compared with its previous expectation of 0.3% growth. The downgrade highlights a slower-than-anticipated recovery, with China’s prolonged property downturn and uncertainty linked to the Middle East conflict adding pressure to the outlook.
The outlook for 2027 has also weakened, with projected global demand growth reduced to 1.7% from 2.2%. While India remains a major source of potential demand growth, the near-term direction of steel prices is likely to depend on the pace of China’s construction recovery, industrial activity and the ability of other major markets to offset persistent weakness.
Market Snapshot
- Steel rebar futures: Approaching CNY 3,080 per ton
- Price trend: Downward pressure, nearing two-month lows
- Global demand forecast for 2026: A contraction of 0.1%
- Global demand forecast for 2027: Growth of 1.7%, revised down from 2.2%
- China demand forecast: Expected to decline by 2% in 2026
- India demand forecast: Growth of 7.9% in 2026 and 8% in 2027
Global Steel Demand Outlook Deteriorates
The World Steel Association’s revised projections signal that the expected recovery in steel consumption is taking longer and proving more uneven than anticipated. Rather than expanding modestly in 2026, global demand is now expected to contract slightly.
Steel demand is closely tied to construction, infrastructure spending, manufacturing and industrial investment. When these sectors lose momentum, steel producers can face weaker orders, greater competition for sales and pressure on prices.
The downgrade to the 2027 outlook also suggests that a rapid rebound may be difficult to achieve. Although demand growth is still expected next year, the lower projection points to a more measured recovery across the global market.
For steel futures, the key issue is whether actual consumption improves enough to absorb available supply. If demand remains weak while production stays elevated, prices could face further downward pressure.
China’s Property Downturn Remains a Major Headwind
China remains central to the global steel outlook, and its property sector continues to weigh on consumption. The World Steel Association expects Chinese steel demand to decline by 2% in 2026, as the property downturn persists longer than previously anticipated.
The construction and property sectors are important sources of steel demand, particularly for rebar used in reinforced concrete. Continued weakness in property development can therefore reduce demand for construction materials and limit the potential for a sustained price recovery.
China’s broader industrial activity and infrastructure investment will also matter. Stronger infrastructure spending could provide some support, but it may not fully offset a prolonged downturn in property-related demand.
Until there is clearer evidence of stabilisation in China’s construction sector, the country is likely to remain a major source of uncertainty for steel prices.
Europe’s Construction Recovery Remains Uneven
Europe’s steel demand outlook has also weakened, with the construction recovery proving slower and less consistent than expected.
A subdued construction market can restrict demand for rebar and other finished steel products, limiting the ability of European producers to benefit from an improvement in broader economic conditions.
The pace of infrastructure investment, industrial activity and construction spending will be important indicators to watch. A stronger recovery could help offset weakness elsewhere, while continued delays would reinforce the subdued global demand picture.
The combination of uncertainty in Europe and declining demand in China leaves the global steel market increasingly reliant on growth from other regions.
India Provides a Key Source of Demand Growth
India remains the fastest-growing major steel market globally, with demand projected to increase by 7.9% in 2026 and 8% in 2027.
This expansion offers a significant counterbalance to weakness in China and Europe. Continued growth in construction, infrastructure development and industrial activity could support higher steel consumption and create opportunities for producers serving the Indian market.
However, strong Indian demand does not automatically translate into higher global steel prices. The overall impact will depend on its scale relative to weakness in larger markets, as well as production levels, trade flows and the availability of steel supplies.
India is therefore an important supportive factor, but the global demand balance remains challenging.
Bullish Scenario: Demand Stabilisation Supports a Recovery
Steel prices could recover if China’s property market begins to stabilise, European construction activity improves and infrastructure spending strengthens across major economies.
A better-than-expected recovery in demand could help reduce the gap between steel production and consumption. Continued expansion in India would add further support, particularly if other major markets begin to recover.
The outlook could also improve if steel producers adjust output to reflect weaker demand, helping limit excess supply and supporting prices.
Under this scenario, rebar futures could move away from recent lows as market participants reassess the likelihood of a broader demand recovery.
Bearish Scenario: Weak Consumption Extends Price Pressure
The bearish outlook would strengthen if China’s property downturn deepens, European construction remains subdued and global steel consumption falls short of current expectations.
A slower recovery in 2027 would also limit confidence in a sustained improvement in demand. If production remains high despite weak consumption, inventories could build and intensify competition among producers.
Disruptions associated with the Middle East conflict may add to uncertainty by affecting supply chains, costs and business confidence. The impact on prices, however, will depend on how these disruptions interact with regional production and actual steel consumption.
In this environment, rebar futures could remain under pressure around current levels or test lower prices if demand deteriorates further.
Steel Price Forecast: What to Watch Next
The near-term steel outlook remains cautious, with the revised global demand projections highlighting persistent weakness in key construction markets. The market’s next direction will depend on whether consumption begins to improve or whether further downgrades become necessary.
Key developments to monitor include:
- China’s property market: Signs of stabilisation in construction and property development could improve expectations for rebar consumption.
- Chinese infrastructure spending: Additional investment could help offset weakness in property-related demand.
- European construction activity: A stronger recovery would support regional steel consumption.
- Indian steel demand: Continued growth could provide an important source of global demand expansion.
- Producer output and inventories: Production adjustments and inventory trends will help determine whether weaker demand translates into sustained price pressure.
- Middle East developments: Further disruption could affect supply chains, costs and market confidence.
A durable recovery in steel prices is likely to require clearer evidence of improving consumption, particularly in China, or meaningful adjustments to production that bring supply more closely into line with demand.
Market Outlook: Steel Faces a Challenging Recovery
Steel rebar futures remain under pressure as the global demand outlook deteriorates, with prices approaching CNY 3,080 per ton. The World Steel Association’s revised forecasts point to a difficult 2026, followed by a slower recovery in 2027 than previously anticipated.
China’s prolonged property downturn and Europe’s uneven construction recovery remain major headwinds. India offers a strong source of demand growth, but its expansion may not be sufficient on its own to offset weakness across other major markets.
The outlook therefore remains cautious. A sustained recovery will depend on stronger end-user demand, improved construction activity and a better balance between steel production and consumption. Until those conditions become clearer, price rallies may face resistance from the weaker global demand backdrop.
Currency Hedger View
Steel’s weakening demand outlook also matters for businesses exposed to commodity prices, international procurement and cross-border payments. Changes in steel prices can influence purchasing costs, supplier negotiations and margins, while movements in currencies can alter the cost of imported raw materials and finished products.
Currency Hedger monitors foreign exchange markets alongside broader commodity and macroeconomic conditions, helping businesses assess and manage their international currency exposure.
Businesses importing steel or purchasing materials across currencies should monitor both commodity-price developments and exchange-rate movements when assessing future costs and managing currency exposure.
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Analysis: Louis Roche, Today Markets
Disclaimer: This article is for informational and educational purposes only and does not constitute investment, trading or financial advice. Commodity futures involve significant risk, and prices can be volatile. Forecasts are conditional on changing economic conditions, demand trends and market developments.
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