Informist, Wednesday, Sept. 3, 2025

MUMBAI – BMI, a unit of Fitch Solutions, has maintained its annual average steel price forecast for 2025 at $630 per tonne, but expects prices to rise slightly in the second half of the year because of production cuts at major mills in Mainland China, which are expected to tighten the global steel market, it said in a report.

While record-high Chinese exports of steel products have piled pressure on global prices in 2024-25, BMI expects this trend to ease in the fourth quarter of 2025 as Beijing reins in excess steel capacity. The global average steel price for longs and flats as of August stood at $608 per tonne but production cuts are likely to push prices higher in the fourth quarter of the year, the report stated. However, prices are expected to remain capped due to lacklustre demand from Mainland China, where construction activity remains sluggish.

In the longer term, BMI expects steel prices to fall due to slowing consumption growth in China. Chinese domestic demand for steel is expected to slow overall in the coming decade compared to the last, as the rebalancing of the economy away from heavy industry and towards the service sector resumes, dragging down domestic steel prices in China and the global average.

"We maintain our view that global steel prices will ease further in the longer term," BMI said. "Ultimately we expect that a combination of slowing Chinese steel consumption growth and rising global steel market protectionism, prompting greater production in affected countries, to loosen the market and drag prices lower in the medium term," it said.

Steel prices could fall further if China's economic momentum remains weaker than expected, BMI said. On the upside, a recovery in China's property sector will be a major factor influencing demand and supporting steel prices.

On the supply side, steel production was depressed across markets in Jan-Jul. Amongst the top 10 steel producing countries, only production from India and the US increased, with Indian steel output up nearly 10% at 94.9 million tonnes and US steel output up 1.5% at 47.4 million tonnes. BMI expects a 0.5% on-year decline in Chinese steel demand this year. End

US$1 = INR 88.07

Reported by Udita S. Jaiswal

Edited by Nishant Maher

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