Asia

China’s steel market has remained under pressure in 2026, with finished steel exports declining 8.1% year on year to 44.55 million tonnes during its first five months. The decline was largely driven by China’s new steel export licensing system, introduced in January, which has curbed the annual growth in shipments. Domestic steel demand continues to be constrained by weakness in the property and construction sectors, while structural overcapacity is expected to keep mills reliant on export markets despite a modest decline in crude steel production.

Geopolitical uncertainties continue to create opportunities for Chinese producers to expand their presence across Asia, the Middle East and Africa. Overall, while Chinese steel exports are expected to moderate from last year’s record levels, continued export competitiveness and subdued domestic steel consumption are likely to cap global recycled steel demand throughout the balance of 2026.

South Korea’s recycled steel market was broadly cautious and uneven in the first half of 2026. Mills largely maintained a hand-to-mouth procurement approach, showing selective interest in regional cargoes but remaining resistant to deep-sea imports amid soft global sentiment and currency-related cost pressures. Despite occasional firmness in local recycled steel pricing, overall sentiment remained fragile and reactive. Conditions were shaped more by subdued construction activity and margin pressure than by any meaningful improvement in end-use steel consumption.

Taiwan’s recycled steel imports declined sharply in the first five months of 2026, falling roughly 25% year over year. Semi-finished imports were down approximately 40%, signalling continued broad-based contraction in raw material demand. Weak domestic conditions, particularly subdued construction activity, continue to limit recycled steel consumption. Crude steel production also remains below historical averages, reinforcing a cautious operating environment for mills.

Traditional recycled steel-consuming countries such as Thailand, Vietnam, Indonesia and Malaysia saw relatively stable demand into early 2026, with little meaningful change in overall purchasing behaviour. Abundant availability of alternative feedstocks continues to limit any material shift towards higher recycled steel consumption. Import volumes remain broadly in line with 2025 levels, with buying activity still largely concentrated on containerised shipments and opportunistic spot cargoes rather than sustained deep sea trade flows.

Bangladesh’s recycled steel market has remained under pressure in 2026, with mills maintaining a cautious approach to imported recycled steel purchases amid weak finished steel demand and significant excess steelmaking capacity. Rising electricity tariffs, higher logistics costs and proposed increases in VAT and import duties on steelmaking inputs are expected to further increase production costs and compress mill margins, limiting raw material procurement. The industry has warned that most mills are operating at less than half of installed capacity, with subdued construction activity and slower infrastructure spending continuing to weigh on steel consumption. Rising cost pressures and weak domestic demand are expected to keep recycled steel import demand subdued until construction activity and industrial output recover.

Indian steelmakers continue to favour iron ore-based feedstocks over imported recycled steel as weak finished steel demand and compressed steelmaking margins weigh on raw material procurement. Metallics demand has remained subdued, with mills limiting purchases amid slower construction activity, exacerbated by delayed monsoon rains and water restrictions in key consuming regions. Imported recycled steel buying has also remained cautious, with mills lowering bids in response to falling billet prices, weaker steelmaking margins and declining global recycled steel prices. This cautious purchasing behaviour continues to limit import demand, reinforcing a preference for domestic iron units where available.

Brazil’s anti-dumping duties on Chinese steel are supporting domestic production, with crude steel output rising 2.4% year over year in May as finished steel imports fell 55%. However, the increase in domestic production has not been sufficient to absorb available recycled steel supply, with exports rising 22% in the first five months of 2026 when compared with a year earlier. Most of this material is being shipped in containers to South Asia. While domestic mills are benefiting from reduced import competition, the recovery remains largely policy-driven, suggesting recycled steel exports will remain in the near term.

The ceasefire in the Iran conflict and the anticipated reopening of the Strait of Hormuz are expected to improve the flow of steelmaking raw materials into the Middle East, supporting a gradual recovery in regional steel production. Shortages of metallics had constrained output and increased reliance on imported billet during the disruption. While improved raw material availability should allow mills to rebuild inventories and normalise production, finished steel exports are expected to recover more gradually as buyers remain cautious following recent supply disruptions and ongoing uncertainty surrounding EU safeguard quotas and Carbon Border Adjustment Mechanism requirements. Overall, easing supply chain disruptions should reduce upward pressure on regional steel prices, although geopolitical and trade policy risks are likely to continue weighing on markets.

Overall, policy intervention has become an increasingly important driver of global steel markets in 2026. Measures designed to protect domestic producers and promote local steelmaking are beginning to improve mill utilisation in several regions, partially offsetting weak end-use demand. While these policies are unlikely to reverse broader market challenges in the near term, they should provide a firmer foundation for domestic steel production and support a gradual recovery in recycled steel demand as market conditions improve.