International credit rating agency Fitch Ratings has stated that the outlook for the global steel sector in 2024 is neutral, reflecting the agency’s expectations that steel markets will become more balanced in 2024 due to demand growth in most regions, except for China, where both production and consumption are projected to decline slightly. The major risks for the global steel market are ongoing inflation in developed markets, and consequently high interest rates, high energy prices and the progress of economic policies in China.
Fitch anticipates that the profitability of steelmakers will rise marginally or remain moderate, aided by improving demand, a slight rise in prices in China, India and Europe, and decreasing raw material prices. Producer margins in China will continue to recover from the extreme lows of 2023.
Looking at different countries, the Indian steel industry is expected to grow, while the Brazilian market is likely to recover as import pressure declines and demand growth remains positive.
Fitch stated that the European steel sector will return to positive growth after a few years of contraction, aided by automotive and industrial production and infrastructure spending amid the easing of inflation and energy costs. In addition, industry consolidation in the US has led to supply discipline and Fitch believes that strategic investments will improve through-the-cycle margins.
