Steel producers remain cautiously optimistic despite challenging international trade conditions, while energy and raw material costs are expected to continue putting pressure on mills at least through the end of the winter, according to Alex Gordienko, export director at Spain's CELSA Group and chairman of the producers committee at the SteelOrbis 2026 Fall Conference & 95th IREPAS Meeting held in Belgrade on September 27-29.
Mr. Gordienko said that regions face different challenges, with European producers particularly affected by energy-related issues. Nevertheless, producers continue to see underlying domestic demand and remain somewhat more optimistic than current market conditions might suggest.
India expected to remain focused on domestic market
Commenting on the rise in Indian steel demand and the decline in the country's export activity, Gordienko pointed to significant infrastructure investments and rapidly growing construction demand, while India's steel production capacity is also increasing. He said he expects India to remain primarily focused on its domestic market over the next five years.
Regarding Southeast Asian suppliers, Gordienko said they will remain competitive internationally, though increasingly selective about their target markets. Their presence is expected to remain significant in the MENA region, while access to the EU will be more difficult due to quota restrictions.
EU needs favorable investment conditions as well as trade protection
Turning to Europe, Gordienko said there is significant potential demand from housing, electricity generation, data centers and defense investments, as well as the replacement of aging infrastructure. However, bureaucratic barriers are preventing these needs from translating into actual construction and investment.
According to Gordienko, the EU has become increasingly effective at protecting its steel market, but less successful in creating economic conditions that make steel production and investment attractive. Safeguards and the Carbon Border Adjustment Mechanism (CBAM) provide some protection, but cannot compensate for issues such as insufficient or expensive energy supply.
Overcapacity and trade barriers to fragment global markets
Addressing global overcapacity, Gordienko said governments increasingly want to preserve domestic steelmaking capacity even when mills struggle to generate profits, while new capacity continues to emerge in several regions.
He said he sees no realistic global mechanism capable of effectively regulating excess capacity. As trade barriers increase, surplus steel will have access to fewer export destinations, increasing the pressure on markets that remain open. At the same time, protected markets could experience temporary shortages and price increases despite substantial global excess capacity.
Gordienko said fragmentation is also changing the traditional steel market cycle. Instead of one broadly synchronized global cycle, individual regions are increasingly likely to follow their own cycles as trade barriers, domestic policies and local market conditions gain importance.
Looking ahead to 2027, he identified fragmentation as a key issue, encompassing overcapacity, Chinese exports and growing trade barriers, with market participants increasingly needing to focus on developments in their own domestic markets.
