"After more than two decades of China increasing its share of global steel production, we believe this structural trend has now come to an end as China's domestic demand continues to falter and barriers to steel exports intensify," Waltham and her team wrote in a note published on Friday morning.
The analysts noted that their global steel supply and demand model forecasted a 3% and 4% year-over-year increase in ex-China steel demand for 2025 and 2026, respectively. As Chinese steel exports are expected to decline, ex-China crude steel production is projected to rise by 3% in 2025 and 8% in 2026.
"While we are bearish on US and European steel prices on the three-to-six month horizon, we expect a re-acceleration in demand growth and lower Chinese steel exports to provide price upside in 2026," Waltham said.
