Metals and steel producers in advanced markets face demand recovery
Global metals and steel performance slows down in 2024
- We expect global basic metals output to slow down to 2.2% this year, after a 5.7% increase in 2023. Main reason is lower production in China and India.
- We forecast global metals and steel production to remain subdued in 2025. However, in advanced markets the sector should benefit from a demand recovery.
- Sustainability-led demand for metals like copper and aluminium should lead to higher sales prices and margins in the long-term
US metals and steel demand rebounds after two years of contraction
- We expect US basic metals output to increase by 3.2% in 2024 and 4.5% in 2025, mainly driven by government stimulus like the Inflation Reduction Act.
- US metals and steel producers have a competitive advantage over their peers in Europe and Japan due to lower energy prices.
Woes in the Chinese steel sector
- Chinese steel producers are suffer from the ongoing liquidity woes in the property sector and subdued economic growth.
- Steel supply exceeds demand, putting prices and margins under pressure.
Positive sector outlook in India
- The country´s rapid economic development, urbanisation, and growing population will sustain metals and steel production in the mid to long term.
European producers face competitive disadvantages
- The sector has suffered from high interest rates, an industrial recession and weak external demand.
- We expect Eurozone metals and steel production to rebound by more than 3%.
- Eurozone metals and steel producers face a permanent competitive disadvantage compared to other countries in terms of energy costs. Investment in cleaner production capacity is another challenge.
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