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Globally, the production of steel decreased by 2.4% in Q3 2022 as compared to Q3 2021. Global steel production went down in Q3 2022 due to persisting inflation, US monetary tightening, China’s economic deceleration, and the consequences of Russia–Ukraine war. High energy prices, rising interest rates, and falling confidence are some of the other reasons for slowing activities in the steel sector. Major steelmaker ArcelorMittal’s crude steel shipment fell by 7.1% on year-over-year basis in Q3 2022. Shipments were impacted by the ongoing war in Ukraine, soaring energy costs, market conditions deteriorated, and forcing the company to cut higher-cost capacity. Globally, the price of steel decreased by 34.6% in Q3 2022 as compared to Q3 2021.

In Q4 2022, the global demand for steel is expected to decline by 4.0% as compared to Q4 2021, as ongoing COVID curbs and a deepening crisis in the real estate sector hit demand, leading to some mills to start maintenance outages early. The price of steel is forecast to decrease by 35.3% in Q4 2022 vs. Q4 2021 due to the weak demand from the real estate and construction sectors, which will continue to put pressure on prices. The figure below depicts the change in demand and change in the price of steel over the past five quarters. Data also provides forecast for Q4 of 2022 as shown below.

                                                                                                                                                      Source: World Steel Association, Lucintel

Figure: Changes in the Global Steel Production and Price Trends 

North America

In North America, steel production declined by 6.3% in Q3 2022 as compared to Q3 2021, and it is expected to decrease further in Q4 2022 as well. The US housing starts declined by 6.5% during Q3 2022 as compared to Q3 2021. The steel production decreased in Q3 2022 due to decreased demand from end use industries, such as automotive and construction. Automotive industry accounts for about 30% of the US steel demand. In Q3 2022, North America’s light vehicle sales declined by 1.0% as compared to Q3 2021.


In terms of steel production in the European region, it decreased by 15.0% in Q3 2022 as compared to Q3 2021. The decrease was majorly due to a decrease in demand in various end use industries, including automotive, construction, and industrial applications. The European steel demand is expected to decline in Q4 2022 due to a deeper-than-expected recession caused by the worsening of the EU economy following Russia's invasion of Ukraine and the subsequent energy crisis. In terms of price, the European region registered a decrease in price of crude steel during Q3 2022 as compared to Q3 2021 due to low demand and an uncertain market outlook.


In Q3 2022, the production of crude steel in the Asian region increased by 1.4% as compared to Q3 2021. Countries like China, India, and Japan produced around 304 million metric tons of crude steel during Q3 2022, an increase by 2% as compared to Q3 2021. The demand for steel is expected to decrease further in Q4 2022 due to the growing concern for global recession and soaring inflation. Another main reason for decreased demand for steel in Q4 2022 is the weak end-user demand because of the winter season and the government's demand to cap production at 2021 levels.


In ROW, steel production decreased by 12.7% in Q3 2022 as compared to Q3 2021, and it is expected to decrease in Q4 2022 as well. The steel demand decreased in ROW due to the continued weakening of its demand, which led to the sharpest fall in steel production.


The price and demand analysis on above is published monthly for various regions. Lucintel analysts collect supply, demand and price data from various suppliers and consumers on a monthly basis and also analyzes news on supply and demand issues, production, and price trends. This allows Lucintel to publish unbiased assessments on price and demand movements to help you make confident business decisions on your negotiation or business issues.

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