The steel industry in 2024 was buffeted by a variety of factors including economic uncertainty, political tensions, and lingering pandemic disruptions, causing steel prices to fluctuate like a rollercoaster.
As we grow closer towards 2025, the steel market remains uncertain, but with opportunity waiting to be harnessed. Here is our forecast for the steel industry in 2025, with insights from experts in the industry, helping businesses better plan for the future.
WHAT HAPPENED WITH THE STEEL MARKET IN 2024?
Prices have fallen significantly from February to August 2023. This can be partly explained by the fact that China, the world’s largest steel producer, ramped up steel production in 2023 after being constrained by the COVID-19 lockdown. Prices rose sharply in 2022 due to the conflict in Ukraine, before falling again. In addition, inflation has added to price pressure, causing both consumers and investors to cut spending, further contributing to the decline in steel prices.
Steel prices in 2024 have been in a moderate range, with the current price at $579.50 (as of July 9, 2024). However, concerns about oversupply have been real this year, with the presence of China’s construction sector threatening to oversaturate the market. In addition, fluctuations in energy costs and raw material prices continue to rock the boat, impacting production costs and ultimately steel prices.
Whether steel prices remain stable or continue to experience significant fluctuations depends on many factors such as:
- Demand for steel products
- Market competition
- Global economic development
Demand for steel in particular is likely to generate further price fluctuations. If demand for steel products in various industries remains stable and is supported by infrastructure and construction projects, steel prices may even increase slightly. However, the construction industry is currently stagnant in Europe, for example, but also in China. As a result, Chinese steel is increasingly exported abroad, which could lead to further price declines.
In addition, the current global political situation, in particular the Middle East conflict and the associated naval blockades, could lead to greater price fluctuations.
In the US, however, the election of Donald Trump as the 47th President of the United States poses an upside risk to MEPS’s short-term price outlook. If higher import tariffs are implemented quickly, supply could shrink, causing larger price increases than currently anticipated. Mexico, the second largest source of long-term product imports to the United States, is particularly at risk of tariff increases.
Remember, this is just a prediction and actual steel prices in 2025 may differ from this forecast. However, staying informed, adapting, and building strong relationships with suppliers can help you navigate the uncertain steel market landscape and make informed decisions for your business.
