Steel Market Outlook & Price Forecasts 2027-2028

Historic Steel Prices

The chart below shows monthly world average export prices for two benchmark products — hot rolled coil (HRC) and reinforcing bar (rebar) — over the thirty years from 1996 to 2026.

The main turning points are summarised below.

Approximate monthly world average export FOB prices.

Three features of the most recent period stand out:

• An unusually flat market. Since early 2023, world HRC prices have traded in a band of roughly $500–560/t, and rebar in a band of roughly $560–630/t. Outside the depressed years of 1999–2002, this is the narrowest range in the thirty-year record.
• Rebar above HRC. Since around 2023, rebar has consistently traded at a premium to HRC, reflecting the relative resilience of construction-related demand outside China and heavy Chinese flat product exports.
• Regional rallies that barely register. The sharp price rises in the US and Europe during 2026 are scarcely visible in the world export average, which is dominated by Chinese, CIS, Turkish and Indian export prices. By late September 2026, US HRC was approaching $1,300 per short ton and European HRC stood at €720–730/t delivered, while Chinese HRC remained below $500/t.^[1][2][3]

The Price Cycle

World steel prices are highly cyclical. Over the last thirty or so years, the average peak-to-peak or trough-to-trough interval has been roughly four to five years, although individual cycles have ranged from three to seven years.

Measured from the Q4 2021 / Q1 2022 peak, a conventional cycle would have produced a trough around 2024 and a new peak around 2026–27. That has not happened. Instead, prices drifted down to a shallow low in 2025 and have since recovered only modestly at a world level. In our view, there are three reasons why the current cycle is different:

1. No supply-side cleansing. Previous troughs forced capacity closures that set up the following recovery. This time, global steelmaking capacity has continued to grow through the downturn, reaching a record 2.445 billion tonnes in 2025.^[4]
2. China is exporting its downturn. With domestic demand falling, Chinese steel exports reached a record 131 million tonnes in 2025 — more than the European Union's entire steel output — holding down export prices worldwide.^[5]
3. Protection has split the cycle by region. Section 232 tariffs in the US, and safeguard measures and CBAM in the EU, have insulated Western markets from world prices. Regional markets are therefore now cycling out of phase: the US appears to have peaked in 2026, Europe's recovery is building into 2027, and Asian and world export prices are lagging.

On this basis, SteelOnTheNet expects the next world price peak in 2028–29 — later than the historical average interval would suggest — with the timing and strength of the European upturn driven more by regulation than by the cyclical mechanism alone.

Market Outlook 2027-2028

Demand

The World Steel Association's Short Range Outlook of October 2026 forecasts that global steel demand will be essentially flat in 2026, at 1,722 million tonnes, before growing by 1.7% in 2027 to 1,752 million tonnes. This is a downward revision from April, when 0.3% growth in 2026 and 2.2% in 2027 were expected — and almost all of the revision is attributable to China.^[1]

The picture outside China is markedly stronger. Demand in the rest of the world is forecast to grow by 1.5% in 2026 and to accelerate to 4.0% in 2027 — a rate rarely seen in recent years — supported by AI-related investment, defence and energy transition spending, and improving incomes in the developed world. Key regional forecasts are:^[1]

Source: worldsteel Short Range Outlook, October 2026 (finished steel products, apparent steel use).

Two caveats apply. First, the developed-world recovery is modest in scale: the 2025 developed-world market was around 15% smaller than in 2017–18, and growth over 2026–27 recovers only a fraction of that gap.^[1] Second, construction — the principal driver of long product demand — is growing only slowly in Europe, with output across the EUROCONSTRUCT-19 area forecast to rise by 2.0% in 2026, 2.2% in 2027 and 1.9% in 2028.^[6]

Supply, Overcapacity and Costs

The supply side remains the main constraint on any world-level price recovery. The OECD's Steel Outlook 2026 projects that global excess capacity — already 640 million tonnes in 2025 — will rise to 745 million tonnes by 2028, as capacity grows by around 139 million tonnes while demand grows by only about 0.9% a year. Capacity utilisation could fall to 74% or below.^[4] The OECD also highlights growing trade diversion, with Chinese products increasingly reaching OECD markets via Southeast Asia.^[5]

In China itself, conditions remain weak. HRC inventories at major spot markets were more than a quarter higher year on year in July 2026, and domestic HRC prices were below year-earlier levels.^[3] Shanghai Metals Market notes that close to 40 million tonnes of new Chinese HRC capacity is planned or under construction for 2026–27, but expects supply growth to slow from 2027 as the peak period of new capacity passes.^[7]

On the cost side, raw material prices are expected to ease rather than rise:

• Iron ore: BMI expects a multi-year downtrend as new supply (including the Simandou project in Guinea) comes on stream, with prices falling to $78/t by 2034.^[8] The National Bank of Ukraine assumes $97/t in 2027 and $95/t in 2028.^[9]
• Metallurgical coal: Fitch Ratings assumes Australian premium coking coal at $180/t in both 2027 and 2028.^[10]
• Ferrous scrap: Turkish HMS 1&2 (80:20) import prices were around $380/t CFR in early September 2026, at the top of their recent range.^[11]

Easing input costs will help mill margins but are unlikely to lift steel prices. While overcapacity persists, it is the surplus of steel — not the cost of making it — that sets the world price. Energy is the main exception: it can account for up to 40% of steelmaking costs, and prolonged instability in the Middle East remains an upside cost risk, particularly for European producers.^[4]

Regulatory Issues

Regulation is now the single most important driver of steel prices in Western markets, and 2027 is the year in which several measures take full effect.

EU safeguard. The new EU steel safeguard regime took effect on 1 July 2026. It cuts tariff-free import quotas by around 47%, to 18.35 million tonnes a year, and doubles the out-of-quota duty to 50%.^[12] 2027 will be the first full calendar year under these rules, and the first in which quarterly quotas are likely to be exhausted early, leaving spot imports to pay the full duty. The UK introduced a parallel regime from July 2026, also with a 50% out-of-quota tariff.^[13]

CBAM. The EU's Carbon Border Adjustment Mechanism entered its definitive phase in January 2026, but the first certificates — covering 2026 imports — must be bought and surrendered during 2027. The CBAM charge is reduced by the free emissions allowances EU producers still receive, which are phased out gradually (by 5% in 2027, 10% in 2028 and fully by 2034), so the charge rises year by year. It bites hardest on high-emission imports assessed using default values: Fastmarkets estimated a CBAM cost of around €100/t for Turkish HRC arriving in Q1 2026 on default values, compared with €40–50/t where actual emissions data were used.^[14] For some origins, default-value costs could reach around €250/t.^[15] S&P Global has observed that regulation is overtaking demand as the main driver of European prices.^[16]

The pre-CBAM stock overhang. One reason European prices have so far risen less than the new rules might suggest is that buyers bought heavily ahead of them. In October 2025, several suppliers' fourth-quarter HRC quotas were used up within two weeks, as European buyers rushed to secure delivery before CBAM began.^[17] EU imports of finished steel from third countries rose by 20% year on year in October 2025 and by 61% in December.^[18] According to Eurofer, imports reached a record 37% of EU apparent steel consumption in the fourth quarter of 2025, before falling by 23% year on year in the first quarter of 2026.^[19] The Port of Antwerp-Bruges explicitly attributed its late-2025 steel import surge to the anticipation of CBAM and tighter trade measures, with coil market observers reporting that the resulting buying spree kept inventories full well into 2026.^[20] A second, smaller wave preceded the new safeguard, with EU HRC imports of 1.4 million tonnes in April 2026 against 0.6 million tonnes in May.^[15]

The gap between apparent and real consumption shows the scale of the effect. Eurofer estimates that EU apparent steel consumption rose by 4.4% in 2025, to 134 million tonnes, whereas real consumption by steel-using sectors rose by only 0.9%.^[19] worldsteel likewise attributes a significant part of the EU's stronger 2025 outturn to stock building ahead of CBAM.^[1] As early as December 2025, the chief executive of Marcegaglia described the European supply chain as overloaded with inventories, and expected destocking to weigh on apparent demand in early 2026.^[21]

The consequence is that 2026 has been a year of destocking. In April 2026, market participants expected HRC to rise to around €770/t delivered by July;^[22] in practice, European HRC stood at €720–730/t delivered in late September.^[2] In our view, this effect is temporary. Once pre-bought inventories are worked off — plausibly during the first half of 2027 — buyers will have to source within the new quotas and pay CBAM costs, turning a 2026 headwind into a 2027 tailwind. Eurofer's June 2026 outlook similarly expects real consumption to grow by 1.4% in both 2026 and 2027, supported by stock replenishment.^[19] It also means that 2026 apparent consumption understates underlying European demand, just as 2025 overstated it.

United States. Section 232 tariffs at 50% continue to insulate the US market from world prices. This divergence is structural for as long as the tariffs remain in place.

Regional Differences

Europe. The combination of a full year of the new safeguard, the first CBAM payments, restocking and a 3.1% recovery in demand makes 2027 the year of more meaningful European price recovery. ArcelorMittal has already announced a further €20/t increase for November 2026 deliveries.^[23] The main risks are weak real demand in construction and automotive, resistance from downstream users, and the Commission's discretion to review quotas if prices rise to levels that seriously harm downstream competitiveness.

Flat versus long products. The European outlook differs sharply by product. Flat products carry higher embedded carbon (global flat supply is dominated by BF-BOF steelmaking) and faced higher import penetration — an estimated 25% of EU consumption, against around 15% for long products — so CBAM and the safeguard bear down much harder on flat imports. Most rebar, by contrast, is EAF-based, with lower embedded carbon, and Western European long product markets are driven largely by intra-EU competition (SteelOnTheNet assessment). A durable rebar price recovery therefore depends on the cyclical upturn in construction, which looks more like a 2028–29 story.

United States. US HRC prices rose almost every week through 2026, approaching $1,300 per short ton by late September, compared with $825–865 a year earlier.^[2] Analysts broadly expect 2027 to be more subdued: Wells Fargo forecasts HRC at $1,000 per short ton, assuming limited tariff change and an end to the Iran conflict, while CRU expects annual fixed-price contracts to reset higher, to $1,100–1,175 per short ton, as 2026 spot prices feed through.^[24] S&P Global Market Intelligence expects data centre capacity additions — a key source of recent demand — to peak in 2028.^[24]

China and Asia. With demand still contracting and capacity still rising, Chinese and Asian export prices are likely to remain subdued through 2027. Shanghai Metals Market suggests that renewed supply-side restrictions and tighter export controls could bring a round of HRC price upside around 2028.^[7]

The Gulf. The Middle East conflict has reversed one of the strongest regional growth stories: worldsteel expects GCC steel demand to fall by around 11% in 2026, after growth of 17.7% in 2025. It regards this as deferred rather than lost demand, and forecasts a rebound of 11.3% in 2027 — provided the uncertainty clears and supply chains normalise.^[1]

What Analysts Forecast

Published third-party price forecasts for 2027–2028 are relatively scarce, and those available point in different directions — reflecting the regional divergence described above.

BMI's forecast — made before the Q3 2026 rally — sees global prices easing in both 2027 and 2028. The National Bank of Ukraine takes the opposite view, expecting steel prices to rise despite falling iron ore prices, driven by decarbonisation costs including CBAM, high European energy costs and a reduction in global supply.^[9] JP Morgan has identified European fiscal expansion as a potential bull-case catalyst for European steel prices.^[26] In the US, the consensus at the August 2026 SMU Steel Summit was that 2027 is unlikely to repeat 2026, although views diverged on the direction of travel.^[24]

Conclusion: SteelOnTheNet's View for 2027-2028

Taken together, the evidence points to a steel market that will remain regionally divided through 2027 and 2028, rather than one moving through a single global cycle:

• Europe — flat products: a further price rise in 2027, driven primarily by regulation and by restocking once the pre-CBAM stock overhang has cleared, with demand recovery playing a supporting role. 2028 is expected to bring a firm plateau and possibly the cycle peak, as the CBAM charge continues to rise, but global overcapacity and political pressure from steel users make a 2021–22-style spike unlikely.
• Europe — long products: subdued until the cyclical recovery in construction, more plausibly in 2028–29.
• United States: past its 2026 peak, with prices easing in 2027 but remaining structurally high while Section 232 tariffs stay in place.
• China and world export prices: subdued through 2027, with possible upside from 2028 if Chinese supply discipline tightens.
• Next world cycle peak: most plausibly 2028–29.

Risks to this view lie on both sides. Prices could rise faster if EU quotas are exhausted early, defence and infrastructure spending accelerates, or energy prices spike again. They could rise more slowly if the Commission loosens quotas, construction and automotive demand disappoint, or diverted Chinese exports circumvent trade defences.

Detailed monthly price projections for 2027 and beyond are available on our steel price forecasts page. See also our analysis of overcapacity barriers, the carbon pricing divide, the global impact of Trump tariffs and zombie steel mills and state aid.

Frequently Asked Questions

Will steel prices rise in 2027?

It depends on the region. SteelOnTheNet expects European flat steel prices to rise further in 2027, driven by a full year of the new EU safeguard, the first CBAM payments and restocking. US prices are expected to ease from their 2026 highs, while Chinese and world export prices are likely to remain subdued.

When is the next steel price peak expected?

The historical cycle averages four to five years from peak to peak, but continued capacity growth and Chinese exports have produced a shallow, extended trough. SteelOnTheNet expects the next world price peak in 2028–29.

How will CBAM affect European steel prices in 2027-2028?

The first CBAM certificates, covering 2026 imports, must be bought and surrendered during 2027, and the charge rises each year as free EU emissions allowances are phased out. The effect is greatest on high-emission flat product imports, particularly those assessed using default values, and much smaller on largely EAF-based long products such as rebar.

Why are US and European steel prices so much higher than world prices?

Trade protection has decoupled them from the world market. Section 232 tariffs of 50% in the US, and safeguard quotas with a 50% out-of-quota duty plus CBAM in the EU, keep lower-priced imports out, allowing domestic prices to trade well above Asian export levels.