The Steel Market is valued at USD 2,073.3 billion in 2025. As per FMI's analysis, the Steel Industry will grow at a CAGR of 4.4% and reach USD 3,371.7 billion by 2035. The year 2024 was a period of steady growth, when the international steel industry experienced multifaceted opportunities and challenges. Key industries with historically strong demand, such as construction, automotive, and infrastructure.
However, steel manufacturers had their own challenges due to the high fluctuations of raw materials, high energy costs, and continued disruptions in supply chains in some regions. Emerging countries, especially Southeast Asia and Africa, which formerly experienced slower-than-expected growth, will witness strong growth as they are driven by rapid urbanization and growing industrial activities.
Likewise, Momentum is being built in decarbonization of steel by increased capital investments in green hydrogen-based production and electric arc furnace technologies by major players to reduce emissions in the industry.
Demand for steel is expected to continue growing in 2025 and onwards, supported by massive investments in infrastructure and the continued recovery of global manufacturing. The increasing electrification of vehicles and expansion of renewable energy projects will further lead to increases in consumption of high-strength and specialty steel products.
Notably, there may be new challenges arising from the regulatory pressures of carbon emissions and geopolitical uncertainties. Sustainability initiatives and adjustments by firms to shifts in trade policies will make more competitive in the emerging steel landscape.
| Metric | Value |
|---|---|
| Industry Value (2025E) | USD 2,073.3 billion |
| Industry Value (2035F) | USD 3,371.7 billion |
| CAGR (2025 to 2035) | 4.4% |
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The world steel industry is on a growth path due to infrastructure investments and an increasing demand for industrial expansion in emerging countries along with automotive and renewable energy sectors. For major manufacturers investing in low-emission technologies, the future holds significant profit opportunities, while traditional blast furnaces would face regional restrictions from stricter environmental mandates and trade policy shifts.
Most importantly, companies embracing sustainability and innovation will be best positioned to capitalize on future growth.
The requirement of carbon steel will rise consistently as construction, automotive, and heavy machinery sectors are involved in increasing activities. Steel's durability, structural strength, and versatility make it a preferred material for constructing buildings and bridges. As a result, the building and construction segment is projected to thrive at 3.8% CAGR during the forecast period.
Low-carbon steel will take most of the demand within the section as it is commonly used in structural applications, whereas medium-carbon steel will find increasing scope in automotive and railway components. Applications needing high strength will still require high-carbon steel for their manufacture, for example, cutting tools or industrial machinery.
A healthy growth of the stainless-steel industry is expected in high-end consumer goods, construction, and medical applications. The highest demand would go towards austenitic stainless steels due to their corrosion resistance and will be indispensable in the kitchenware and piping systems. Increased use of ferritic stainless steel will be in automobile exhaust systems, while martensitic stainless steel will be critical for aerospace and medical instruments.
High-performance applications will continue to prefer alloy steel, while high-strength steel will find a much greater use in light-weight vehicle manufacture. Low-alloy steel will be widely used in oil and gas pipelines, while tool steel will continue to play a vital role in precision machining and industrial equipment. Emerging specialty steel types will also fall under the"other" category because they are niche application steel types.
The building and construction sector will continue to be the biggest consumer of steel, with a huge demand in the consumption of high-strength and corrosion-resistant grades. Based on end use, building and construction segment is anticipated to hold a dominant share through 2035. It is set to exhibit a CAGR of 3.8% during the forecast period.
High strength and corrosion-resistant grades will be in high demand-from escalators and lifts to stainless and alloy steels for their framing. Architectural excellence will be much renowned in cladding portions on a building. Frames and supporting rails require robust steel compositions for enhancing structural integrity.
The expansion of urban infrastructure will fuel the demand for piping, plumbing and drainage, and roofing solutions-all of which will have to be supported by durable steel products. In automotive, lightweight high-strength steel will be used in chassis and automotive body parts, transitioning to electric vehicles: both in new developments and replacing older equipment used in the construction of existing networks.
These efforts aim to make railways major consumers of steel, given that they continue to expand their rail networks in emerging economies. Shipbuilding and marine applications will require corrosion-resistant and high-tensile steel for large vessels. and offshore platforms. Much higher demand is expected by aerospace sectors to manufacture light-weight high-performance steel alloys.
Invest in Green Steel Technologies
Executives should prioritize investments in low-emission steel production methods, such as hydrogen-based direct reduction and electric arc furnaces. Stricter global carbon regulations and increasing demand for sustainable materials will make green steel a key differentiator in the industry. Companies that integrate these technologies early will secure long-term cost advantages and enhance their ESG positioning.
Align with Evolving End-Use Industry Demands
Stakeholders must closely monitor shifts in key industries such as automotive, construction, and energy. The rise of electric vehicles, renewable energy infrastructure, and high-performance lightweight steel demand will reshape supply chain priorities. Steel producers should develop customized alloys and advanced coatings to meet the changing needs of these sectors, ensuring long-term relevance.
Optimize Supply Chains Through Strategic Partnerships
Companies should strengthen their supply chain resilience by forming strategic partnerships with raw material suppliers, logistics providers, and downstream customers. Investing in regional production hubs and digitalized inventory management will mitigate geopolitical risks and transportation disruptions. Expanding mergers, acquisitions, and joint ventures in emerging industries will also create new growth opportunities.
| Risk | Probability - Impact |
|---|---|
| Raw Material Price Volatility | High - High |
| Carbon Regulation Tightening | Medium - High |
| Geopolitical Trade Disruptions | High - Medium |
| Priority | Immediate Action |
|---|---|
| Decarbonization Investments | Launch pilot projects for hydrogen-based steel production |
| Automotive & EV Alignment | Initiate OEM feedback loop on lightweight steel demand |
| Supply Chain Diversification | Expand regional partnerships to mitigate sourcing risks |
To stay ahead, companies must act decisively to align with decarbonization mandates, shifting industrial needs, and supply chain uncertainties. Investing in sustainable production, high-value specialty steel, and resilient global distribution networks will be critical to maintaining competitive advantage. This intelligence underscores the urgency of adapting to green regulations and industry trends-companies that move quickly will not only mitigate risks but also capture premium margins and long-term partnerships in emerging sectors.
Future Market Insights (FMI) surveyed 450 steel industry stakeholders in Q4 2024, including manufacturers, distributors, infrastructure developers, and automotive OEMs across the United Kingdom, Germany, France, Italy, the United States, Japan, and South Korea. The findings reveal distinct regional variations in demand trends, sustainability adoption, and investment priorities, shaping the steel industry’s trajectory from 2025 to 2035.
In the UK, three out of five respondents cited slow domestic steel production growth due to high energy costs and outdated facilities. 40% of manufacturers expressed concerns about increasing competition from lower-cost European imports, while one-third of distributors indicated that infrastructure projects, including rail and commercial construction, will drive steel demand.
Sustainability remains a key focus, with 70% of stakeholders agreeing that hydrogen-based steel production and electric arc furnace (EAF) adoption will be necessary to align with the UK’s net-zero by 2050 targets. However, only 25% of steel manufacturers reported active investments in decarbonization initiatives, citing high capital costs as a barrier.
Germany and France demonstrated strong alignment in their steel industry outlook, with over 65% of surveyed automotive OEMs prioritizing high-strength and lightweight steel for electric vehicle (EV) production. In Germany, four out of ten steel manufacturers reported increased R&D spending on advanced steel alloys tailored for battery enclosures and lightweight chassis components.
French respondents highlighted offshore wind energy as a growth driver, with one-third of infrastructure developers forecasting a 30% rise in demand for corrosion-resistant steel used in wind turbine towers and floating structures. Regulatory pressures are also shaping investment decisions-60% of German and French manufacturers acknowledged that compliance with the European Union’s Carbon Border Adjustment Mechanism (CBAM) will increase production costs by at least 5-10% over the next five years.
In the United States, six out of ten steel manufacturers reported rising demand from infrastructure projects, driven by government funding for roads, bridges, and energy pipelines. The Inflation Reduction Act (IRA) has accelerated investment in sustainable steel, with 35% of producers already implementing emission-reducing technologies. However, supply chain risks remain a key concern-40% of USA-based distributors reported difficulties in securing raw materials due to volatile global trade conditions.
Additionally, one-third of respondents cited labor shortages as a significant challenge, leading to increased investment in automation and digital manufacturing. US manufacturers were also optimistic about AI integration, with 45% stating that digital tracking and predictive analytics will enhance production efficiency by at least 10% over the next decade.
Japan’s steel industry outlook remains conservative, with 55% of surveyed manufacturers reporting slow domestic demand due to a stagnating construction sector. However, Japan’s strength lies in high-end specialty steel exports-four out of ten steel producers expect increased orders from the aerospace, electronics, and precision machinery industries.
In contrast, South Korea is positioning itself as a global leader in high-strength automotive steel and shipbuilding steel, with 60% of South Korean respondents forecasting a 20% increase in production capacity by 2030. The country’s major steelmakers are also leading in decarbonization efforts-50% of Korean manufacturers have already committed to carbon-neutral steel production by 2045, outpacing European and American peers in green technology adoption.
Across all regions, sustainability, digitalization, and high-value steel innovation will define the next decade of industry growth. While European and Asian stakeholders are prioritizing low-carbon production, the USA remains focused on infrastructure-led demand and reshoring efforts. 70% of global respondents agreed that hydrogen-based steel and scrap-based EAF production will be the dominant decarbonization pathways.
However, the biggest challenge for all industries remains balancing regulatory compliance with cost efficiency-four out of ten manufacturers cited high capital expenditures as a major barrier to scaling green steel production. Stakeholders that successfully integrate automation, AI-driven manufacturing, and strategic partnerships will gain a competitive edge in the evolving steel landscape.
| Country | Regulatory Impact & Mandatory Certifications |
|---|---|
| United Kingdom | The UK government’s Net Zero Strategy and carbon pricing policies are pushing steel manufacturers toward low-emission production. The UK Emissions Trading Scheme (UK ETS) requires steelmakers to reduce CO₂ emissions or purchase allowances. The government also supports green steel initiatives through funding programs like the Industrial Energy Transformation Fund (IETF). Steel products used in construction must meet BS EN 1090 certification for structural components. |
| Germany | Germany enforces strict decarbonization rules under the Federal Climate Protection Act, which mandates a 65% reduction in industrial emissions by 2030. The Carbon Border Adjustment Mechanism (CBAM) will impose tariffs on imported high-carbon steel, giving an advantage to domestic green steel production. Steel manufacturers must comply with DIN EN 10025 standards for structural steel and ISO 14001 certification for environmental management. |
| France | France is aligned with the EU’s Fit for 55 packages, targeting a 55% reduction in emissions by 2030. The Low-Carbon Industrial Strategy incentivizes hydrogen-based steelmaking, with funding from the France 2030 investment plan. Importers and producers must comply with NF A 35-503 standards for construction steel and EU REACH regulations for chemical safety. |
| Italy | The Italian government offers tax incentives for steel manufacturers investing in energy efficiency under the Transizione 4.0 Plan. The National Recovery and Resilience Plan (PNRR) allocates funds for digitalization and sustainable steel production. Italian steel used in public infrastructure must comply with UNI EN 10025 and ISO 45001 safety certification for workplace conditions. |
| United States | The Inflation Reduction Act (IRA) provides tax credits and grants for steelmakers transitioning to low-carbon technologies. The Buy America Act mandates the use of domestically produced steel in federally funded infrastructure projects. Steel manufacturers must adhere to ASTM A6/A6M standards for structural steel and OSHA workplace safety regulations. |
| Japan | Japan’s Green Growth Strategy promotes hydrogen-based steelmaking, with government subsidies covering up to 50% of green technology investments. The Japan Industrial Standards (JIS G 3101) sets the quality benchmark for steel production, while ISO 50001 energy management certification is encouraged for efficiency compliance. |
| South Korea | South Korea’s Carbon Neutrality Roadmap 2050 sets emission reduction targets for the steel industry. The government supports research on hydrogen-reduced steel production through grants from the Green New Deal. Steel producers must meet KS D 3515 certification for structural steel and KOSHA safety standards for industrial operations. |
| Company | Market Share & Competitive Positioning (2024) |
|---|---|
| China Baowu Steel Group | The world’s largest steel producer, controlling approximately 12% of global steel production. Strong domestic demand and government backing allow it to dominate Asian industries. Expansion in green steel technologies and acquisitions solidify its leadership. |
| ArcelorMittal | Holds around 6-7% of global industry share, with a strong presence in Europe, North America, and India. Investments in low-carbon steel production and partnerships for hydrogen-based steelmaking are strengthening its sustainability profile. |
| Nippon Steel Corporation | Commands 5-6% of the industry, leading Japan’s high-quality specialty steel segment. Recently expanded production capacity and is focusing on automotive-grade steel for EVs. Strategic acquisitions have boosted global reach. |
| POSCO (South Korea) | Controls 4-5% of global industry share, specializing in high-performance and stainless steel. A leader in hydrogen steelmaking, with substantial investments in green technology and advanced digitalization. |
| HBIS Group (China) | It holds approximately 4% of the industry, with a strong domestic presence. Actively shifting towards green and specialty steel production to align with China’s emission reduction policies. |
| JFE Steel Corporation | Accounts for 3-4% of global steel production, with a focus on high-end automotive and shipbuilding steel. Investments in hydrogen-based steelmaking position it for future sustainability leadership. |
| Tata Steel | Holds about 3% of the industry, with a growing presence in India, Europe, and Southeast Asia. Recent expansions in India and sustainable steel initiatives are key competitive advantages. |
| United States Steel Corporation (USA Steel) | Industry share stands at 2-3%, heavily reliant on North American infrastructure projects. Recently announced major EAF investments to transition toward low-emission steel production. |
| JSW Steel | Captures 2-3% of the industry, expanding aggressively in India and the Middle East. Significant investments in capacity expansion and green steel initiatives are driving growth. |
ArcelorMittal & Hydrogen-based Steel Expansion - In Q1 2024, ArcelorMittal announced a USD 1.5 billion investment in Spain’s hydrogen-based steelmaking, partnering with the Spanish government to accelerate decarbonization.
Nippon Steel’s US Expansion - In March 2024, Nippon Steel acquired USA Steel for USD 14.9 billion, making it the world’s fourth-largest steelmaker and expanding its footprint in North America.
POSCO & Green Steel Innovation - In April 2024, POSCO signed an agreement with Rio Tinto to develop low-carbon steelmaking technologies, focusing on hydrogen-based production.
With an anticipated 4.1% CAGR from 2025 to 2035, the USA steel industry is growing steadily, driven by federal infrastructure investment, reshoring efforts, and increasing demand from the automotive and energy sectors. Government policies such as the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law are accelerating demand for steel in large-scale projects, particularly in roads, bridges, and renewable energy infrastructure. The Buy America Act further strengthens domestic steelmakers by mandating USA-produced steel in federally funded projects.
The automotive industry is another key driver, particularly with the shift to electric vehicles (EVs), which require lightweight, high-strength steel for battery enclosures and safety structures. USA steelmakers are investing heavily in electric arc furnace (EAF) technology to meet sustainability goals. However, challenges such as rising raw material costs, labor shortages, and competition from imported steel remain. Increasing digitalization and automation in steel production will play a crucial role in boosting efficiency and maintaining competitiveness.
The UK steel industry is projected to grow at a 3.8% CAGR, slightly below the global average due to high energy costs and competition from European and Asian producers. The UK government’s focus on green steel production and hydrogen-based steelmaking is driving industry transformation. Policies like the Industrial Energy Transformation Fund (IETF) and the Net Zero Strategy provide financial support for reducing carbon emissions in steel manufacturing.
Infrastructure projects, particularly in rail expansion, commercial construction, and offshore wind energy, are expected to fuel steel demand. However, high operational costs and imports from low-cost producers pose challenges for domestic manufacturers.
The UK Emissions Trading Scheme (UK ETS) is adding financial pressure on steelmakers, requiring them to either invest in emission reductions or purchase carbon credits. Despite these hurdles, increased demand for stainless steel and high-strength alloys in aerospace and defense is supporting growth. The UK’s long-term competitiveness will depend on its ability to scale green steel technology.
France’s steel industry is set to expand at a 4.2% CAGR, driven by rising demand in automotive manufacturing, renewable energy, and infrastructure projects. The country is a leader in offshore wind energy, with major investments in corrosion-resistant steel for wind turbine towers and floating structures. France’s commitment to the European Union’s Fit for 55 package is accelerating efforts to decarbonize steel production.
The automotive sector, particularly electric vehicle (EV) manufacturing, is another key growth driver. French automakers are shifting towards lighter, high-strength steel alloys to improve fuel efficiency and range. The Carbon Border Adjustment Mechanism (CBAM), which imposes tariffs on high-carbon steel imports, is expected to benefit domestic producers while encouraging greener manufacturing.
However, high energy prices and regulatory compliance costs are ongoing challenges. The France 2030 investment plan is funding research into hydrogen-based steelmaking, positioning France as a leader in low-carbon steel innovation.
Germany is expected to experience a 4.5% CAGR, slightly above the global average, due to its strong industrial base and demand for advanced steel in automotive, construction, and energy sectors. Germany’s steel sector is undergoing a significant transformation, with major investments in hydrogen-based steel production and electric arc furnaces (EAFs). The country’s strict climate policies under the Federal Climate Protection Act mandate a 65% reduction in industrial emissions by 2030, pressuring steelmakers to innovate.
The automotive industry is Germany’s largest consumer of steel, with over 65% of manufacturers prioritizing lightweight and high-strength steel for EV production. The offshore wind energy sector is also creating demand for high-performance, weather-resistant steel.
However, German steel producers face high operational costs and increasing competition from Asian exporters. The EU’s CBAM policy offers some protection, but manufacturers must balance cost efficiency with sustainability. Increased R&D funding and digitalization are key to maintaining Germany’s competitive edge.
Italy’s steel industry is projected to grow at a 4.0% CAGR, supported by its strong construction sector, industrial manufacturing, and rising investments in green steel production. The Italian government has launched the Transizione 4.0 Plan, offering tax incentives to steel manufacturers investing in energy-efficient technologies. Additionally, the National Recovery and Resilience Plan (PNRR) is injecting capital into modernizing Italy’s steel industry.
The construction sector remains a key driver, with demand for structural steel in public infrastructure projects, commercial buildings, and residential developments. Italy’s automotive and shipbuilding industries also contribute significantly to steel consumption. However, challenges such as high energy prices, regulatory hurdles, and reliance on imported raw materials persist.
The shift toward hydrogen-based steelmaking is gaining traction, with Italy increasing partnerships with European sustainability initiatives. To stay competitive, Italian steelmakers are focusing on automation, digitalized production, and strategic supply chain partnerships to reduce costs and improve efficiency.
New Zealand’s steel industry is expected to grow at a 3.6% CAGR, below the global average, primarily due to its smaller industrial base and reliance on imports. However, growing investments in construction, infrastructure, and renewable energy projects are increasing domestic steel demand. The New Zealand Infrastructure Commission has planned major transportation, housing, and energy grid modernization projects, which will require large volumes of steel.
Sustainability is a major focus, with strict emissions targets under the Zero Carbon Act pushing the industry towards greener steel production. However, high production costs and a lack of large-scale domestic steel manufacturing pose challenges.
Most steel is imported, primarily from Australia, China, and South Korea. The government is incentivizing recycling and scrap-based steel production, but progress remains slow. Future growth will depend on investments in low-carbon steel, automation, and increased local production capacity to reduce dependence on foreign suppliers.
South Korea’s steel industry is expected to grow at 4.6% CAGR, above the global average, due to its strong shipbuilding, automotive, and construction sectors. The country’s Carbon Neutrality Roadmap 2050 is accelerating investments in hydrogen-reduced steel production, with major players like POSCO leading the transition. South Korea’s government is also supporting R&D initiatives for green steel, ensuring its competitiveness in the global industry.
The automotive industry is a key driver, with over 60% of manufacturers investing in high-strength, lightweight steel for EV production. South Korea’s shipbuilding industry, one of the world’s largest, is another major consumer of steel, requiring high-tensile, corrosion-resistant steel for next-generation vessels.
However, rising energy costs and competition from Chinese manufacturers remain key challenges. Digitalization and AI-driven manufacturing are helping improve efficiency, while strategic partnerships with raw material suppliers are stabilizing production costs.
Japan’s steel industry is projected to grow at a 4.0% CAGR, supported by its high-quality specialty steel production and increasing demand from the automotive and electronics sectors. Japan’s Green Growth Strategy promotes hydrogen-based steelmaking, with government subsidies covering up to 50% of investment costs. This initiative is positioning Japan as a global leader in sustainable steel manufacturing.
The automotive industry remains a core driver, with four out of ten steel manufacturers reporting increased R&D spending on advanced steel alloys for EVs. Japan also leads in precision steel production for electronics, robotics, and aerospace applications. However, slow domestic construction growth and high energy prices are limiting expansion.
The focus on AI-driven automation, digital tracking, and predictive analytics is expected to enhance production efficiency. Japan’s steel industry will remain competitive due to its commitment to quality, innovation, and sustainability in steel manufacturing.
The steel industry is expanding due to rising demand in construction, automotive manufacturing, renewable energy projects, and infrastructure development. Innovations in sustainable production, such as hydrogen-based steelmaking, are also playing a crucial role.
East Asia, particularly China, Japan, and South Korea, continues to dominate demand, while North America and Europe are seeing increased steel consumption due to infrastructure modernization and green energy investments. Emerging economies in South Asia and Africa are also showing strong growth potential.
Trade policies, tariffs, carbon emission regulations, and incentives for green steel production are significantly shaping production and distribution strategies. The EU’s Carbon Border Adjustment Mechanism (CBAM) and the USA Inflation Reduction Act are key examples.
The industry is embracing electric arc furnaces (EAFs), AI-driven automation, and hydrogen-based steelmaking to enhance efficiency and sustainability. Digitalization and predictive analytics are also improving supply chain management.
Variations in iron ore, coking coal, and scrap metal prices directly affect production costs and profitability. Geopolitical tensions, supply chain disruptions, and shifting trade agreements are key factors influencing material availability and pricing.
Carbon Steel, Low-Carbon Steel, Medium-Carbon Steel, High-Carbon Steel, Stainless Steel, Austenitic Stainless Steel, Ferritic Stainless Steel, Martensitic Stainless Steel, Others, Alloy Steel, High Strength Steel, Low Alloy Steel, Tool Steel, Others
Building and Construction, Escalators and Lifts, Cladding, Frames and Supporting Rails, Piping, Plumbing and Drainage, Roofing, Automotive, Chassis, Automotive Body Parts, Others, Railways, Shipbuilding and Marine, Aerospace, Oil and Gas and Energy, Heavy Machinery and Equipment, Consumer Appliances, Cutting Tools and Agriculture Equipment
North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia Pacific, Middle East, Africa
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