Steel Production Declines, Forecasts for Ferrous Metals Shift to Upward Revision
Global crude steel output fell 4.2% month‑on‑month in July, largely driven by an 8.1% drop in China. Futures curves for Chinese iron ore and European hot‑rolled coils now imply higher 2027 prices, prompting PricePedia to lift its steel metals index forecast by 0.6% in 2026 and 1.1% in 2027. The upward revision is attributed to lower supply, higher energy costs from Middle‑East tensions, and new European protectionist measures.
Global crude steel output fell 4.2% month‑on‑month in July, largely driven by an 8.1% drop in China. Futures curves for Chinese iron ore and European hot‑rolled coils now imply higher 2027 prices, prompting PricePedia to lift its steel metals index forecast by 0.6% in 2026 and 1.1% in 2027. The upward revision is attributed to lower supply, higher energy costs from Middle‑East tensions, and new European protectionist measures.
In the short to medium term, iron and steel prices are expected to climb, improving margins for producers but potentially increasing volatility as supply constraints tighten. Traders should monitor energy price spikes and policy changes that could further tighten the market.