The global steel industry is going through a major structural change. It is moving from a system mainly led by China and other East Asian countries to a more balanced and competitive global market. 

Although demand is slowly recovering, and the World Steel Association expects growth in the next two years, the problem of oversupply still exists. New capacity continues to grow faster than demand, leading to low utilization rates and hundreds of millions of tons of excess capacity. This creates ongoing pressure for steel producers.

There is also a clear difference between traditional steel-producing countries and emerging markets. China’s steel production and consumption have both decreased, falling below one billion tons for the first time since 2020. Japan, South Korea, and Germany have also reduced their output. In contrast, India is growing quickly, with strong increases in both production and demand, and it is expected to lead global growth. At the same time, regions such as Vietnam, the Middle East, and Africa are becoming new centers of demand.

Trade and government policies are also changing the market. Even though demand in China is weaker, its steel exports have reached record levels, with more focus on Southeast Asia and the Middle East. Meanwhile, the United States and India are increasing local production and using protection policies to reduce imports and improve capacity use. As tariffs and trade barriers increase, global trade is becoming more restricted.

In addition, the shift toward low-carbon production is creating new challenges. The European Union has started the Carbon Border Adjustment Mechanism (CBAM), and free carbon allowances will be reduced over time, increasing costs for traditional steel production. China has also included the steel industry in its carbon trading system, pushing companies to reduce emissions. 

Under the pressure of both trade protection and environmental rules, steel companies must move faster toward low-carbon production and develop higher-value products to stay competitive in this changing global market.