The Global Metal and Steel Sector: Production, Prices, and the Green Steel Push

1. Introduction

Metals and steel are the backbone of modern infrastructure, manufacturing, and construction, making them fundamental materials driving global economic activity. For businesses on platforms like bidmatchai.com, understanding the dynamics of this sector – including production trends, price volatility, key players, technological shifts like green steel, and trade policies such as tariffs and CBAM – is critical for sourcing, investment, and managing supply chain risks. This article will cover global production/consumption patterns, factors influencing prices, major companies and sustainability efforts, the rise of green steel technologies, environmental impacts, and relevant trade policies.

2. Global Production, Consumption, and Key Players

• Production Trends: According to World Steel Association (worldsteel) data, global crude steel production was 1,892 million tonnes (Mt) in 2023, relatively stable since 2020 (1,885 Mt), with peaks in 2021 (1,963 Mt) and dips in 2022 (1,890 Mt).50 March 2025 production showed a 2.9% year-on-year increase.51 Stainless steel production grew 7% in 2024 to 62.6 Mt.51 EU production volumes declined between 2018-2020.52

• Consumption Trends: Global steel demand is expected to rebound (+1.1%) in 2025 after a slight dip (-1.0%) in 2024, driven by rising industrial production and stronger construction activity outside China.53 Chinese demand, about half the global total, is expected to fall in 2025 53, though earlier forecasts suggested continued growth.54 Per capita steel use globally was 219 kg in 2023.50 EU consumption fell between 2018-2020.52

• Major Producing Companies: Top global producers by 2023 tonnage include China Baowu, ArcelorMittal, Ansteel, Nippon Steel, HBIS Group, Shagang Group, POSCO Holdings.50 Other key players include Tata Steel, Nucor, Hyundai Steel, Thyssenkrupp.50

• Major Producing/Trading Regions: China dominates production.50 The Asia-Pacific region is dominant in the sustainable steel market.55 The EU is a major producer and consumer but has seen declines.52 Countries like China, India, Russia are significantly impacted by trade policies like CBAM due to export volumes and production methods.56

• Production Methods: The Blast Furnace-Basic Oxygen Furnace (BF-BOF) route dominates (71.1% in 2023), followed by Electric Arc Furnace (EAF) (28.6% in 2023).50 The share of EAF is growing, especially for recycled/green steel.55

While global steel demand is set for a modest rebound, the primary growth engine appears to be shifting away from China, even as it remains the dominant producer. Future growth increasingly relies on other regions. CRU forecasts the 2025 global demand increase despite a projected 10 Mt fall in Chinese demand.53 World Steel data shows China Baowu as by far the largest producer.50 This suggests that while China's scale still dictates overall global production figures, its domestic demand may have peaked or is declining, requiring the Rest of the World (ROW) to pick up the slack for future global demand growth. This implies potential opportunities in non-Chinese markets, but also risks if China's excess capacity floods global markets.

3. Price Drivers and Market Intelligence

• Key Factors Influencing Prices:

• Supply/Demand Balance: The balance between underlying demand from construction and industrial production 53 and production levels/capacity utilization.5

• Raw Material Costs: Fluctuations in iron ore prices significantly impact steel costs.54 Energy costs are also critical.50

• Geopolitics and Trade Policy: Tariffs 13 and mechanisms like the EU CBAM 56 directly affect costs and trade flows.

• Economic Conditions: Broader economic growth (GDP forecasts 17), inflation 17, and currency fluctuations 17 impact demand and costs.

• Market Intelligence Providers: Key sources for pricing, data, and analysis include:

• CRU Group: Provides the Steel Market Update (SMU) service with weekly pricing, trend analysis, interactive tools, and insights on challenges like decarbonisation and tariffs.53

• S&P Global Commodity Insights (Platts): Offers benchmarks (Platts World Steel Review), data, analysis, news, forecasts covering ferrous and non-ferrous metals.62

• World Steel Association (worldsteel): A key source for global production, consumption, and sustainability data.50

• Price Trends: Note historical price volatility (e.g., EU prices fell 2018-2020 52; iron ore prices rose in 2020 54). Mention current market dynamics from latest reports (e.g., potential supply increase 62).

Steel prices are increasingly driven not just by traditional supply/demand fundamentals, but by a complex interplay with government policies (tariffs, carbon pricing like CBAM) and geopolitical events. While raw materials 54 and demand 53 are fundamental, the cited texts repeatedly highlight the impact of tariffs 13 and CBAM 56 on costs and trade patterns. Geopolitical risks are also cited as a major concern overall.5 This suggests that forecasting steel prices requires analyzing not only market data but also the political and regulatory landscape, adding layers of complexity and uncertainty for businesses.

4. Environmental Impact and the Rise of Green Steel

• Environmental Footprint: The steel industry is energy-intensive (avg. 21.27 GJ/tonne in 2023 57) and a major CO2 emitter (avg. 1.92 tCO2/tonne crude steel in 2023 57; ~16% of China's total emissions 63). The BF-BOF route (2.33 tCO2/t) is more CO2-intensive than scrap-EAF (0.68 tCO2/t) or DRI-EAF (1.37 tCO2/t).50

• Decarbonization Drivers: Climate targets (Paris Agreement 61), regulatory pressure (EU Green Deal, CBAM 56), investor pressure (shareholder resolutions 64), and market demand for sustainable materials.55

• Green Steel Technologies:

• Hydrogen Direct Reduction (H2-DRI): Using green hydrogen instead of coal/gas to reduce iron ore in a DRI furnace, producing "green iron" with water as a byproduct.66 Often paired with EAFs. Seen as a key pathway.68 Tata Steel Nederland is investing in large-scale H2-DRI.67 Baowu's HyCROF project uses hydrogen-enriched gas in a modified furnace.63 Nippon Steel is exploring hydrogen injection into BFs (COURSE50/Super COURSE50) and H2-DRI.64

• Electric Arc Furnaces (EAFs): Primarily use steel scrap, significantly lower emissions than BF-BOF route.50 Can also use DRI. A key part of green/recycled steel production.55 Nippon Steel exploring large EAFs for high-grade steel.64

• Carbon Capture, Utilization, and Storage (CCUS): Capturing CO2 emissions from traditional processes. Part of Nippon Steel's strategy.68

• Other: Energy efficiency improvements, renewable energy use, byproduct recycling (slag, dust, gas).61

• Company Sustainability Initiatives:

• ArcelorMittal: Published 2024 Sustainability Report.72 Focus on safety, decarbonisation (low-carbon steel examples, R&D), ResponsibleSteel™ certification (42 sites), biodiversity, human rights.72 Achieved CO2 reductions since 2018.72

• China Baowu: Worldsteel Sustainability Charter Member.51 Developing HyCROF technology for significant CO2 reduction.63 Focus on green, low-carbon development, ESG reporting based on SASAC/exchange guidelines.73 Rated as a world-class enterprise.69

• Nippon Steel: Published 2024 Integrated Report (consolidating sustainability).68 Aims for carbon neutrality by 2050 via multi-track approach (H2 injection, EAF, H2-DRI).68 Set 2030 target (-30% vs 2013).64 Developing NSCarbolex Neutral green steel brand.68 Investing in R&D, energy saving, circular economy (Eco Products, recycling).70 Faces criticism on pace and reliance on BF closures.64

• Sustainable Steel Market: Growing rapidly (est. $330bn in 2023, proj. $820bn by 2034, 8.5% CAGR).55 Driven by construction demand and regulations.55

5. Trade Policies Affecting Steel

• US Tariffs: Section 232 tariffs on steel and aluminum remain a factor.59 Recent analysis shows tariffs imposed as of March 2025 (incl. 25% on steel/aluminum) significantly increased the average effective tariff rate (AETR).78 Tariffs raise costs for downstream users and consumers.59 Trade policy uncertainty is a major business concern.59 US tariffs noted to disrupt global value chains and raise prices.13

• EU Carbon Border Adjustment Mechanism (CBAM): Specifically targets carbon-intensive imports like iron and steel.56 Aims to prevent carbon leakage by applying a charge on embedded carbon equivalent to the EU ETS price.61 Transitional phase (reporting) runs until Dec 2025, with financial obligations (buying certificates) starting Jan 2026.61 Expected to increase costs for producers in countries without carbon pricing (e.g., China, India, Russia 56), potentially shifting trade to lower-carbon suppliers.56 Incentivizes decarbonization globally.56

• Reciprocal Tariffs: Recent US proposals include "reciprocal" tariffs affecting multiple sectors and trading partners, adding another layer of complexity.60

Trade policies like the EU CBAM explicitly link environmental performance (carbon intensity) to market access and cost competitiveness, forcing global steel producers to accelerate decarbonization or risk losing market share in key regions. CBAM imposes a direct cost based on embedded emissions for imports into the large EU market.56 This creates a clear financial incentive for non-EU producers to lower their carbon footprint to remain competitive.56 It shifts sustainability from being solely an environmental/CSR concern to a fundamental trade and competitiveness issue for carbon-intensive sectors like steel, forcing the green transition onto the global trade agenda.

6. Actionable Insights for Your Business

• Monitor Price Drivers: Track not just supply/demand, but also raw material costs, energy prices, and critically, trade policy developments (tariffs, CBAM) using sources like CRU, S&P Global, and worldsteel.50

• Assess Supply Chain Carbon Footprint: Understand the embedded carbon in your steel supply chain to prepare for CBAM compliance and potential cost impacts, especially if importing into the EU.56

• Explore Green Steel Options: Investigate sourcing lower-carbon steel (EAF-based, H2-DRI based) as availability increases, driven by producer initiatives and market demand.55

• Factor in Policy Uncertainty: Build resilience into sourcing strategies to account for potential new tariffs or trade disputes affecting steel.13

• Engage with Suppliers: Discuss decarbonization plans and sustainability credentials (like ResponsibleSteel™ certification 72) with your steel suppliers.

Connect with BidmatchAI: Suggest how the platform could help businesses identify suppliers offering certified green steel, find alternative suppliers in different regions to mitigate tariff/CBAM risks, or monitor supplier ESG performance.