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On/off/reciprocal tariffs amid tenuous global economic growth have weakened the chance for further crude steel production recovery this year
Fastmarkets’ latest crude steel production forecast, released 28 March 2025, reveals a steep turnaround in prospects for crude steel production in 2025, compared to the outlook released just 3 months prior. The analyst team has forecasted total global production for the year at 1.846bn tonnes, down from the 1.88bn forecasted in December 2024. Since the December forecast, the full 2024 crude steel data release revealed a stronger Q4 2024 than anticipated, while vacillating tariff decisions and reciprocal tariffs levied by the US government on nearly all imports of materials and finished goods have had a dragging effect on the overall steel outlook.
Q4 2024 global crude steel production ended at 1.878bn tonnes, up nearly 21Mt from the expected annual total. These increases were mainly centered around China, US and Asia (x-China). At the very end of 2024, Chinese crude steel production recovered enough to make a push to finish the year over 1Bn tonnes, a threshold Fastmarkets expected would not be surpassed in 2024. Outside China, Asian crude steel production outpaced expectations in Vietnam, South Korea and India. In the US, steel prices hit bottom in July 2024 and started a meandering recovery through the second half of the year, bolstering crude steel output.
With 2024 totals higher than expected, and the cutback in expectations for 2025, the difference results in a stark change between forecasts. Nevertheless, these shifts result in a drop of 34Mt in the overall outlook between December and March. Moreover, the latest forecast results in a year-on-year swing from a 23Mt gain to a decline of 32Mt from 2024 to 2025. Market fundamentals continue to weaken as global steel demand stalls amid uncertainty over trade policies, environmental regulation and ongoing conflicts.
China is where Fastmarkets predicts the strongest declines in output will be, despite the strong finish to 2024. We continue to forecast that annual output will fall below 1bn tonnes, and will struggle to reach that threshold throughout the longer-term view. Construction – the largest driver of steel demand growth in China – is stagnating, while export opportunities continue to be constrained by trade action and competition from other Asian countries. Meanwhile, Beijing has placed recommendations on lowering steel production.
Southeast Asian producers are also facing headwinds from anti-dumping duties and tariffs on their goods. While China is no longer a significant seller of steel products to the USA, other Asian producers have stepped up to fill in the gaps left by China, and are now facing tighter restrictions.
Fastmarkets’ India outlook has been downgraded, although the near and longer-term outlook is for modest growth. Public investment in infrastructure in India was intended to stimulate private spending and investment, although the plan has not played out to the degree expected, leading steelmakers to depend on the competitive export market.
North American crude steel production will be faced will with significant challenges due to uncertain and changing trade policies on steel and downstream products from the US. We surmise that Mexico will struggle to reach 14Mt of crude steel production this year and next. The vacillating tariff announcements and impositions are affecting manufacturer sentiment and foreign investment decisions. The closed AHMSA works are unlikely to return to the market and support the domestic steel demand.
Fastmarkets continues to contend that the US macro environment does not support strong steel demand growth. The forecast is now for a 1.5Mt year-on-year decline in output rather than a 9Mt boost as we expected in December as steel prices were in recovery amid positive sentiment over a new administration. With the imposition of further tariffs on nearly all imports into the country, further inflationary pressure, and waning sentiment, it is unlikely that steel production will see a near-term boost in output. This is a similar outcome to the original Section 232 tariff imposition where the intended 80% capacity utilization rate and higher steel prices was short-lived as the fundamentals came into play once the uncertainty settled. In the current case, the uncertainty continues to fuel poor sentiment, and dragging steel product demand down.
The longer-term forecast for global crude steel output growth does turn positive in 2026, although the downside risks remain. Retaliatory tariffs and a full-blown trade war could exacerbate the current dour outlook.
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