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Steel price forecast 2023: What’s next for the market?

By  Yoke Wong and Nicole Willing

Edited by Valerie Medleva


Blast furnace smelting liquid steel in steel mills
What can we expect from the steel price in the coming months? – Photo: ABCDstock/

The price of US steel have fallen slightly recently after a several month uptrend that started in October 2022. 

As of 6 April, the US Midwest Domestic Hot-Rolled Coil (HRC) Steel (CRU) continuous futures contract was up 55.5% since the start of the year.

Prior to the uptrend, steel prices had seen a steep decline starting in May 2022. The global market weakened in late March 2022 amid spiralling inflation, Covid-19 lockdowns in parts of China and the conflict between Russia and Ukraine heightened demand outlook uncertainty in 2022 and 2023.

Support for China’s property sector

The package of support for the property sector had the biggest impact on sentiment – some 17 property developers have announced financing plans since the government ended a fundraising ban, with 13 expected to get a combined CNY90bn ($13bn). 

Despite the recent thaw in sentiment, the future remains uncertain, as the US Federal Reserve (Fed) and other major central banks have committed to continue hiking interest rates to calm inflation.

On 2 March, the Fed raise rates for the secon time in 2023, by 25 basis points (bps), pushing benchmark borrowing rates to a target range of 4.75% to 5.00%.

Such high interest rates are widely expected to cause problems in the future, as they are likely to reduce demand from key steel consumers such as the automotive and construction industry.

Are you interested in learning more about steel commodity prices and their outlook? In this article, we'll look at recent news affecting the market, along with analysts’ latest steel price predictions.

Geopolitical instability drives steel market uncertainty

In 2021, the US HRC steel price trend was up for most of the year. It hit a record high of $1,725 on 3 September 2021 before falling in the fourth quarter.

US HRC steel prices have been volatile since the start of 2022, mostly maintaining a downward trajecotry. According to CME steel price data, the August 2022 contract started the year at $1,040 per short ton, and fell to a low of $894 on 27 January, before rebounding above $1,010 on 25 February 2022 – the day after Russia invaded Ukraine. 

The price rallied to $1,635 per US short ton on 10 March on concerns about disruptions to steel supply. But the market turned bearish in response to lockdowns in China, which dampened demand from the world’s largest steel consumer.

US Midwest HRC Steel Index 5-Year Price Chart

HRC steel ended 2022 trading at $666/T – 53.68% down since the start of the year.

So far in 2023, the price has seen a steady incline, largely helped by the ending of Covid lockdowns in China. In the first three months of the year it rose 55.4% from $749 to $1,164. As of 6 April, it was at $1,165.

In its Short Range Outlook (SRO) for 2022 and 2023, the World Steel Association (WSA), a leading industry body, said:

“The current forecast represents a downward revision over the earlier forecast, reflecting the repercussion of persistently high inflation and rising interest rates globally.”

In a piece on the EU construction sector in early September, ING analyst Maurice van Sante highlighted that expectations of lower demand globally – not just in China – were putting downward pressure on the price of the metal:

“Since the outbreak of the pandemic in 2020, many building materials have increased in price. However, some of these prices have stabilised or have even decreased a bit in the last few months. Steel prices, in particular, have tapered off a bit due to the expectation of lower steel demand as forecasts for economic development in many countries are lowered.”

China’s steel demand falls on zero-Covid policy

China is both the world’s largest steel producer and consumer, accounting for more than half of global output and finished steel demand. According to the WSA, China produced 1,032.8 billion tonnes of crude steel in 2021 – equivalent to 52.9% of global output. The country consumed 666.5 million tonnes of finished steel products, equivalent to 51.9% of global apparent steel use in 2020.

As part of China’s zero-Covid policy, the country imposed strict lockdown measures in Shanghai in April 2022. Shanghai is China’s key financial hub and one of the nation’s major ports. The restrictions severely disrupted the country’s import and export operations, hitting Chinese economic growth in the second quarter. As the disease permeated throughout other areas of the country, the authorities reacted accordingly, imposing restrictions in line with the zero-Covid outlook.

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The NBS manufacturing PMI contracted for a second consecutive month in November, along with the broader Caixin PMI, which unexpectedly edged up to 49.4 in November 2022 from 49.2 in October, above market forecasts of 48.9. However, this was the fourth straight month of fall in factory activity, amid a new wave of Covid cases and tough curbs in many parts of the country. Output fell for the third month running output, new orders were under pressure and foreign sales remained weak. 

“Whether the demand is there really depends on the steps that China takes to try to hit its growth target of 5.5% for 2022,” Warren Patterson, head of commodities strategy at Dutch bank ING, noted on 29 June.

“China’s zero-Covid policy means this target will be extremely difficult to achieve. China has already announced stimulus measures to try and help growth, which would include a boost in infrastructure spending. Infrastructure projects are generally metals-intensive and so should be supportive of steel demand.”

China’s steel output was lower before the lockdowns, as the government ordered production cuts at the start of the year, during the Winter Olympics.

“According to government data, cumulative crude steel production over the first five months of the year totalled a little more than 435 metric tonnes (mt), down 8% year-on-year (YoY). China’s state planner has made it clear that it wants crude steel production capped at below 2021 levels,” Patterson explained.
“However, given the lower steel output seen so far this year, it does leave mills with room to increase output, whilst still keeping output below 2021 levels. China produced 560mt between June and December last year. And assuming that the full year 2022 output at most matches last year’s levels, this leaves the potential for up to 600mt of production over the remainder of the year, almost a 7% increase year-on-year.” 

In late November, analytics firm MEPS International underlined that other Asian nations’ steel production is also projected to fall:

“Chinese steelmaking is forecast to fall in the second half of the year. Covid-19 lockdowns are suppressing domestic manufacturing activity. Expectations that domestic steel consumption would increase after the Golden Week holidays proved to be unfounded. Furthermore, despite recently announced fiscal measures to support the Chinese property sector, underlying demand is weak. As a result, melting activity is forecast to decline in the fourth quarter. 

“In South Korea, the estimated melting figures for the July/September period fell, quarter-on-quarter, due to weather-related damage to POSCO’s steelmaking plants. Despite plans to rapidly bring those facilities back online, South Korean production is unlikely to recover significantly in the final three months of this year.  

“Indonesian steelmaking is estimated to have slipped in the July/September period, quarter-on-quarter. Market participants report shortages of nickel pig iron – a key raw material for stainless steel production in that country. Furthermore, demand in Southeast Asia is muted.”

Steel production outside China largely struggled last year due to the Russia-Ukraine war. New WSA data shows that steel output from Russia, other CIS countries and Ukraine fell by 23.7% in October 2022 compared with the same month a year earlier to 6.7 million tonnes, and decreased 19% in January-Oct 2022 to 72.6 million tonnes.

Steel output from the EU was down 17.5% in October year-on-year, and 9.2% throughout January to October 2022. Production in other European countries was down 15.8% compared with October 2021 and 9.8% throughout January to October, affected by higher energy prices and weaker downstream demand, particularly from the auto industry.

In late November, steel market analysis firm MEPS International noted that weak demand in Asia would limit the global steel price recovery:

“China, which is responsible for approximately half of steel production worldwide, is suffering from a prolonged period of low market activity. Economic growth is being negatively affected by the authorities’ zero-Covid strategy. Moreover, supply chain difficulties and financial problems in the real estate sector are weighing heavily on consumer confidence.

“Domestic hot rolled coil prices, in November, fell to their lowest level since June 2020. The expected seasonal improvement in demand in September and October failed to materialise. Policymakers subsequently unveiled a 16-point plan to support the ailing property sector. However, this is not expected to provide any substantial short-term boost to steel prices. Weak trading conditions are likely to persist in China until the end of the first quarter of 2023.”

ING analyst Warren Patterson summarised the latest WSA data at the end of November:

“The latest data from World Steel Association shows that global steel output remained unchanged YoY at 147.3mt in October, as production gains from Asia and the Middle East were offset by output losses from Europe, Russia and Ukraine. Cumulatively, total output fell 4% YoY to 1,553mt in the first 10 months of the year.

“Meanwhile, Chinese steel production gained 11% YoY to 79.8mt in October, despite efforts by local authorities to curb output. However, from Jan 2022 – Oct 2022, steel output in China declined 2.2% YoY to 861mt. Among other Asian nations, India’s steel output rose 2.7% YoY to 10.5mt last month, while YTD production also increased 6.1% YoY to 103.8mt in the first 10 months of the year.”

Chinese steel demand, prices could rebound after lockdowns

The market has experienced signs of cautious optimism as some virus curbs in China were eased following rare street protests, but that has been counterbalanced by concern about the near-term outlook for the nation’s housing market – a key source of steel demand.

The price of raw materials (iron ore and coal) is expected to remain high in 2022 due to geopolitical tensions and state-mandated measures to reduce carbon emissions. Fitch Ratings expected steel prices to remain fairly high this year.

The WSA forecast steel demand in China to remain flat in 2022 and potentially increase in 2023 as the Chinese government tries to boost infrastructure investment and stabilise the real-estate market.

“The stimuli introduced in 2022 are likely to support small positive growth in steel demand in 2023. There is upside potential from more substantial stimulus measures, which is likely if the economy faces more challenges from the deteriorating external environment,” said the WSA.

Global steel consumption was expected to increase to 1.84 billion tonnes in 2022, up 0.4% from 2021. In 2023, steel demand was forecast to grow 2.2% to 1.88 billion tonnes. However, the WSA warned that projections are subject to high uncertainty. 

Let’s check what the steel price forecast could potentially look like, according to market analysts.

Steel price forecast: Should you go long or short?

According to a recent forecast by information provider S&P Global, hot-rolled coil prices in Europe and the United States could potentially stay around the $800/metric tonne level throughout Q4 2022 and extend into 2023:

“Steel prices essentially collapsed in May through early July [2022]. The Russian invasion of Ukraine caused prices to rise by $500 per tonne in Europe and the United States, but they were already back down by $600 or more by mid-July. Another $200-$250 per tonne is expected for coil; the question is whether the rapid collapse continues, meaning steel prices fall fast and reach a bottom by the end of 2022, or whether the remaining decline stretches into 2023.

“We are adopting the second scenario, as prices consolidate when electricity and natural gas shortages restrain steel production. Risk, however, is dominant to the downside. In fact, the only strong upside risk through the end of 2022 is energy shortages become so severe that steel production is cut severely.

“Steel supply fears are largely gone. The almost immediate recovery in Russian exports of ore, scrap and semi-finished means that steel production disruption has not been significant in Europe or North America. Almost the only upside risk to steel prices is an embargo of Russian steel and raw materials. However, this appears unlikely as all political effort has targeted petroleum.

“Steel prices are plummeting, although still above their long-term average. More declines will come, so delay locking as long as possible. Beware steel production cuts if electricity is rationed.”

Algorithm-based forecaster WalletInvestor was bullish in its long-term forecast for the US HRC price as of 6 April. The site predicted that the price could end 2023 $1,047.047 and continue to climb in the coming years. Wallet Investor’s steel price forecast for 2025 saw the price rising to $1,516.411 by year-end.

Due to the heightened uncertainty and volatility in the market, analysts have tended to refrain from giving a long-term steel price forecast for 2030. 

Note that predictions can be wrong and that analysts’ steel price forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose. Keep in mind that past performance is no guarantee of future returns.


Is steel a good investment?

Whether steel is a good investment for you depends on your investing goals and portfolio composition. You should do your own research, and never invest any money that you cannot afford to lose.

Will steel prices go up or down?

With the uncertainty caused by the Russian invasion of Ukraine and related market volatility, it is unclear whether steel prices will go up or down in the remainder of 2023.

Should I invest in steel?

Whether you choose to invest in steel is a personal decision that you should make based on research into how the market is performing and the outlook for your preferred investing time horizon.

Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose. Bear in mind that past performance is no guarantee of future returns.

What factors affect the price of steel?

Supply and demand affect the price of steel. The prices of steel-making raw materials – iron ore and coking coal – are also key drivers of steel prices.

As steelmaking is an energy-intensive process, the price of oil and gas will affect steel prices as well.

Why has the steel price been going up?

The steel price has been rising because of a stronger demand outlook, brought about by the end of lockdowns in China. Covid-related restrictions had previously caused usage of the commodity in the world’s largest steel-consuming country to fall.

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