China’s steel demand will decline by 5–7 million tons annually over the next decade as the country shifts away from construction-led growth, creating large surpluses in the global market, research firm Wood Mackenzie said Wednesday.
The decline comes as China moves away from building-led growth, creating big surpluses, the report shows.
China's share of global demand is projected to plunge from 49% in 2024 to 31% by 2050, while India's consumption is forecast to nearly triple, raising its share from 8% to 21%.
Southeast Asia is also set to double its demand share from 5% to 10%, driven by rapid industrialization in countries such as Vietnam, Thailand and Indonesia.
"China's overcapacity crisis is reaching unprecedented levels," said Charvi Trivedi, senior research analyst at Wood Mackenzie in the report.
"But India and Southeast Asia are emerging as global powerhouses," Trivedi added.
India's steel market grew 8% in 2024 and is expected to rise another 7% this year, supported by government-led infrastructure projects and expanding manufacturing sectors, particularly in automotive and machinery.
Southeast Asia is projected to follow a similar growth path, with Vietnam, Thailand and Indonesia leading demand.
Meanwhile, global steel trade is shrinking as protectionist policies and anti-dumping duties restrict Chinese exports.
Wood Mackenzie said global exports are expected to fall from 25% of production today to about 12% by mid-century, as supply chains become more regionalized.
Analysts warn that excess capacity and weak margins are hindering investment in "green steel" production, particularly in Europe and China.
Trivedi said stronger government support and clearer regulation will be essential to accelerate the industry's transition to low-carbon production.
By Gulsen Cagatay
Anadolu Agency
energy@aa.com.tr