Steel Prices Forecast to Rise from January 2026: Global Supply, Trade Policy & Cost Drivers Explained

Introduction: A Turning Point for the Global Steel Market

As the global steel industry approaches 2026, a growing consensus is emerging among market consultancy agencies, industry analysts, producers, and institutional observers: steel prices are likely to trend upward from January 2026 onward.

This expectation is not driven by short-term speculation or isolated market disruptions. Instead, it reflects a structural realignment of the global steel ecosystem, shaped by tightening supply, rising production costs, regulatory intervention, and resilient end-user demand.

Insights from GMK Center, Reuters, and other authoritative industry sources point to a convergence of forces that are steadily strengthening steel price fundamentals. Unlike previous price rallies that were often driven by temporary demand surges or supply shocks, the anticipated uptrend into 2026 is rooted in longer-term economic, policy, and industrial shifts.

For participants across the steel value chain—steel producers, scrap suppliers, recyclers, traders, construction firms, OEMs, and infrastructure developers—this changing landscape demands strategic preparation. For users of the LOHAA digital trading platform, which connects verified buyers and sellers across multiple countries, understanding these dynamics is essential for effective sourcing, pricing, and inventory planning.

This article provides a deep, structured analysis of why steel prices are expected to rise heading into 2026, how these forces vary by region, and what they mean for the global steel and scrap markets.

The Global Steel Market Entering 2026: Setting the Context

The years following the pandemic reshaped the steel market dramatically. Price volatility became the norm as the industry navigated supply chain disruptions, energy price shocks, inflation, and uneven demand recovery across regions.

By 2024–2025, markets began stabilising, but uncertainty remained elevated. What has changed heading into 2026 is not merely the balance of supply and demand, but the rules of engagement under which the steel market now operates.

Three defining characteristics stand out:

• Supply discipline is replacing volume-led expansion, especially in China.
• Cost inflation has become structural, not cyclical, driven by energy, decarbonisation, and logistics.
• Policy and regulation are actively shaping price floors, rather than passively influencing trade flows.

Together, these shifts create a fundamentally different environment from the one that prevailed in the decade prior to 2020.

1. Tightening Supply and Trade Policies: The Foundation of Price Support

China’s Steel Output Decline and Its Global Significance

China remains the most influential force in the global steel market, producing more steel than the rest of the world combined. As a result, even modest changes in Chinese output have outsized effects on global pricing.

According to Reuters, China’s steel production has fallen to multi-year lows, with expectations that output will remain capped rather than rebound aggressively. This shift is driven by several structural factors:

• Government-mandated capacity controls
• Environmental and emissions compliance
• Financial pressure on inefficient producers
• Weakness in the domestic real estate sector

Unlike previous downturns, Chinese authorities are not incentivising mass production to stimulate growth. Instead, policy is focused on preventing oversupply, stabilising domestic prices, and reducing environmental impact.

This approach has two critical implications for the global market:

• Reduced export volumes, particularly of low-priced steel that previously capped international prices
• Improved pricing power for producers outside China, especially in Europe, India, and North America

As Chinese exports decline or become more regulated, global steel prices become more responsive to regional cost structures and demand conditions.

Export Licensing and Trade Controls

Beyond production cuts, trade policy is increasingly shaping steel market dynamics.

Reuters reports that China is moving toward export licensing mechanisms aimed at curbing trade frictions and exerting greater control over outbound steel flows starting in 2026. While the exact framework continues to evolve, the direction is unmistakable: unrestricted low-margin exports are no longer aligned with China’s strategic priorities.

Simultaneously, other regions are reinforcing trade defences:

• The European Union continues to refine safeguard quotas and anti-dumping measures
• The United States maintains tariffs and import restrictions
• Emerging economies are adopting selective protection to support domestic steel industries

Collectively, these measures reduce the availability of low-cost imported steel, creating a more supportive pricing environment for domestic producers.

Producer Pricing Discipline and Early Signals

One of the clearest indicators of future price direction is the behaviour of major steel producers themselves.

According to GMK Center, ArcelorMittal has already announced price increases for hot-rolled coil (HRC) for early 2026 deliveries in the European market. Such moves are rarely speculative. They reflect confidence that:

• Demand will remain sufficient to absorb higher prices
• Import competition will be constrained
• Buyers are prepared for price adjustments

Historically, when large integrated producers successfully raise prices, it sets a benchmark that often cascades across the market.

2. Raw Material and Energy Cost Inflation: Structural, Not Temporary

Iron Ore and Coking Coal Dynamics

Steel production remains heavily dependent on upstream raw materials, particularly iron ore and coking coal. While prices for these inputs fluctuate, their long-term average has shifted upward compared to pre-pandemic levels.

Several factors underpin this trend:

• Concentration of high-grade iron ore supply
• Geopolitical risks affecting coal exports
• Environmental restrictions on mining activity
• Rising freight and logistics costs

When raw material prices remain elevated, steelmakers face limited room to absorb costs. In a tightening supply environment, cost pass-through becomes unavoidable, reinforcing upward pressure on finished steel prices.

Scrap Markets and the Rise of EAF Steelmaking

The global steel industry is undergoing a structural shift toward electric arc furnace (EAF) production, driven by decarbonisation goals and operational flexibility.

As EAF capacity expands, steel scrap becomes a strategic raw material rather than a residual input. Scrap prices are influenced by:

• Collection and processing efficiency
• Demolition and industrial activity
• Export demand from emerging markets
• Environmental regulations affecting recycling

With more producers competing for quality scrap, scrap prices are expected to remain firm, supporting higher steelmaking costs and, ultimately, higher finished steel prices.

For a digital platform like LOHAA, where scrap trading is central, this shift enhances the importance of transparent pricing and verified market access.

Energy Costs and Decarbonisation Investments

Energy has emerged as one of the most critical cost components in steel production.

Electricity prices, natural gas costs, and carbon pricing mechanisms vary widely by region but remain volatile across the board. At the same time, steelmakers are investing heavily in low-carbon technologies, including:

• Hydrogen-based direct reduced iron (DRI)
• Carbon capture and storage
• Energy-efficient furnaces and rolling mills

These investments require capital recovery, which reinforces the case for structurally higher steel prices over the medium to long term.

3. Demand Fundamentals: Infrastructure and Manufacturing as Anchors

Infrastructure Spending as a Long-Term Driver

Infrastructure investment continues to provide a stable base for global steel demand:

• India is expanding highways, railways, urban infrastructure, and renewable energy capacity
• Middle Eastern economies are investing in construction, logistics hubs, and industrial diversification
• Europe and North America are modernising aging infrastructure and energy networks

These projects consume large volumes of rebar, structural steel, plates, and sections, supporting demand for long products well into 2026 and beyond.

Manufacturing, Automotive, and Industrial Demand

Manufacturing activity outside China remains resilient, particularly in:

• Automotive production
• Capital goods and machinery
• Renewable energy equipment
• Heavy engineering and shipbuilding

Even moderate growth in these sectors supports steel consumption volumes that justify higher price levels, especially when supply growth is constrained.

Demand Resilience Despite China’s Property Slowdown

While China’s domestic steel demand has softened due to challenges in the property sector, the global steel market has become more geographically diversified.

Demand growth in India, Southeast Asia, Africa, and the Americas reduces downside risk and strengthens the case for stable to rising global prices in 2026.

4. Policy and Regulation: Creating a New Price Floor

Carbon Border Adjustment Mechanism (CBAM)

One of the most transformative developments in the steel market is the European Union’s Carbon Border Adjustment Mechanism (CBAM).

From 2026, CBAM will impose carbon-related costs on imported steel, effectively:

• Increasing the landed cost of imports
• Penalising carbon-intensive production
• Supporting higher domestic steel prices

Even exporters from traditionally low-cost regions will face compliance costs, reinforcing upward price pressure across global supply chains.

U.S. Trade Protections

The United States continues to enforce tariffs and safeguard measures that limit low-priced steel imports. These policies have historically resulted in higher domestic steel prices compared to global averages, a trend expected to persist into 2026.

5. Market Sentiment and Strategic Buying Behaviour

Expectations Shape Market Outcomes

Market sentiment plays a critical role in commodity pricing. Industry polls referenced by Steel Industry News indicate that a majority of market participants expect steel prices to rise in 2026.

Such expectations influence behaviour in two important ways:

• Buyers accelerate procurement, tightening spot availability
• Producers resist discounting, reinforcing price stability

This dynamic can create a self-reinforcing upward trend, particularly in markets with constrained supply.

Front-Loading and Inventory Strategy

Manufacturers and traders increasingly front-load purchases to hedge against anticipated price increases. While this does not change long-term demand, it can create short-term supply tightness, amplifying price movements during key buying periods.

Regional Price Outlook: A Non-Uniform Uptrend

While the global trend is upward, regional differences will persist:

• Europe: Strong support from CBAM and trade safeguards
• United States: Elevated domestic pricing due to tariffs
• India: Balanced growth supported by infrastructure demand
• China: Stable prices driven by supply discipline rather than demand growth

Understanding these regional nuances is essential for global traders and scrap suppliers.

What This Means for LOHAA Platform Users

For the LOHAA community—scrap traders, recyclers, steel buyers, and sellers across 18+ countries—the evolving price outlook has clear implications:

• Scrap suppliers may benefit from structurally higher scrap demand
• Steel buyers should plan procurement strategically to manage cost risk
• Traders can leverage regional price differentials
• Recyclers gain increased importance in a decarbonising steel ecosystem

As a KYC-verified digital trading platform, LOHAA enables transparent, efficient participation in an increasingly complex market environment.

Conclusion: Preparing for a Firmer Steel Market in 2026

The expectation that steel prices will rise from January 2026 reflects deep structural changes in how steel is produced, traded, regulated, and consumed.

Tightening supply, rising costs, policy intervention, resilient demand, and evolving market behaviour together create a strong foundation for higher price levels.

For industry participants, success in 2026 will depend not just on anticipating price movements, but on strategic preparation, informed sourcing, and disciplined inventory management—supported by digital platforms like LOHAA.