Global Steel Market Under Pressure

Global Slowdown, Trade Wars, and Geopolitical Tensions Weigh Heavy

The Indian steel industry is under pressure due to global slowdown, with February 2025 exports down 60% and imports 40%. Geopolitical tensions, trade wars, and tariffs like the US's 25% import duty and EU's CBAM threaten competitiveness. However, India’s domestic demand is expected to grow 8–9% in FY25, offering resilience amid falling global steel consumption and rising input costs.

The Indian steel market is facing immense pressure from a global economic slowdown. Conflicts such as the Israel-Palestine war, Russia-Ukraine war, and rising tensions between the US-Gulf nations and Russia-Europe have disrupted supply chains and weakened steel demand worldwide. Additionally, trade wars and higher import duties imposed by the US and other nations are further dampening India’s steel exports.  

To understand the depth of trade slowdown, let’s analyze the latest trends, data, and key factors shaping the Indian steel industry trade.  

1. Global Slowdown & Falling Steel Demand

The global economy has been facing a slowdown due to multiple factors, including geopolitical tensions, high inflation, rising interest rates, and supply chain disruptions. This economic deceleration has significantly impacted industrial sectors, particularly the steel industry, which is highly sensitive to macroeconomic conditions. The below reasons are further affecting the steel demand globally. 

Reduced construction activity due to slowdown in Real estate. Key countries including China, Europe and the United states are facing massive slowdown in real estate resulting in slowdown in construction activity. 

Manufacturing production declined globally affecting steel demand.

High energy costs in European region leading to lower purchase

Several reasons are also mentioned in our recent study on the Global steel market, where we tracked down every key reason and presented them in very detailed manner. Contact us for more insights.

2. Geopolitical Tensions Disrupting Trade Flows  

The war and trade disputes have disrupted supply chains and increased energy costs, affecting steel production and demand. 

Russia-Ukraine War: Sanctions on Russia have disrupted coal and coking coal supplies, increasing input costs for Indian steelmakers.  

Red Sea Crisis (US-Gulf tensions): Rising freight costs and shipment delays have made exports to Europe and Africa more expensive.  

Israel-Palestine War: The Israel-Palestine conflict has created regional uncertainty, temporarily dampening Gulf steel demand due to cautious investment and supply chain risks. However, long-term demand remains tied to oil prices and ongoing infrastructure projects. A prolonged conflict could further weaken steel consumption through trade disruptions and economic instability.

China’s Economic Woes: As the world’s largest steel producer, China’s sluggish demand is flooding global markets with cheap steel, pressuring Indian exports.

3. Rising Trade Imbalances & New Sanctions  

US Section 232 Tariffs: The US imposes a 25% tariff on imports from India, hurting Indian shipments. However, Steel aluminum and copper remain untouched in this tariff structure and decisions will be taken in upcoming periods.

EU’s Carbon Border Tax (CBAM): From 2026, Indian steel exporters will face additional levies, making them less competitive.  

India’s Shipment Challenges: In February 2025, steel exports dropped by 60%, while imports declined by 40%, putting significant pressure on Indian manufacturers and forcing them to raise steel prices.

Further, more reasons are explored in our study of Global steel market study. Contact us for more details.

 4. Domestic Steel Demand: A Silver Lining?  

While global headwinds persist, India and African countries' domestic demand remains increased which generates significant revenue opportunities in these regions.

Indian and African Government infrastructure push 

Strong construction & automotive sectors  

Rising rural consumption  

India's steel demand is projected to grow at a robust 8-9% in FY25, significantly outpacing global trends. Meanwhile, steel exports and imports are expected to rebound, rising at a steady 2-3% during the same period. To know about other countries and for in-depth insights into global steel demand, trade dynamics, and competitive intelligence—including distributor trends and competitor strategies—connect with our experts to uncover actionable data tailored to your needs.

 5. The Road Ahead: Can India Overcome the Challenges?  

To counter global pressures, Indian steel makers must:  

Focus on domestic value addition (specialty steel, high-grade products).

Diversify export markets (Africa, Southeast Asia).

Adopt green steel initiatives to comply with CBAM norms.

Leverage government PLI schemes for steel sector growth.  

Final Thoughts  

The global steel industry is at a crossroads—caught between global demand weakness and domestic growth potential. While geopolitical risks and trade barriers pose challenges, countries' domestic demand and policy support could help steelmakers navigate the storm.  

As we navigate the uncertainties of 2025, do you believe the global steel industry is poised for a rebound?

Share your perspective in the comments—we’d love to hear your analysis.

For those seeking deeper, tailored insights into the steel and metals sector, our specialized research offers a comprehensive exploration of emerging trends, challenges, and opportunities. Reach out to uncover the finer details shaping the industry’s future.

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