Global steel price update for May: prices broadly rose, but regional supply-demand divergence remains pronounced

Overview

This report is the May update of Goldman Sachs' global steel market barometer, focusing on global hot-rolled coil and rebar price performance, as well as steel production and demand indicators across China, Europe, the United States, Latin America, India, Japan, and the Black Sea region. Overall, April saw broad-based steel price increases, with Brazil showing the strongest performance in both sheet and long-product prices and the United States maintaining high price levels; however, year-over-year production performance was mixed, with China, Europe, Latin America, Japan, and the Black Sea region all facing varying degrees of pressure, while India continued to grow rapidly.

Core views

The report's core view is that the near-term improvement in global steel prices is already relatively clear, especially in Brazil and the United States, where pricing was strong; however, the industry's fundamentals are not recovering synchronously, and supply discipline, property and macro demand, and trade flows remain key determinants of whether the price recovery can continue. In China, policy still points toward anti-involution and long-term capacity cuts, but the execution pace in 2026 may be delayed, so uncertainty remains between price improvement and supply constraints.

Analysis framework

The report uses a regional price and production tracking framework, comparing spot levels, monthly changes, and year-to-date performance for hot-rolled coil and rebar across major regions, and combining that with regional crude steel output, capacity utilization, macro and property indicators, as well as trade and demand data, to form a cross-regional view of where the global steel cycle stands.

Methodology notes

• Industry price trackingSteel Market Barometer

  Global steel barometer

  Tracks steel industry conditions through hot-rolled coil and rebar prices, regional output, and demand indicators, with a focus on price momentum, supply changes, and regional divergence.

• Stock factor frameworkGS Factor Profile

  Goldman Sachs factor profile

  Goldman Sachs' proprietary framework for comparing a stock's growth, financial returns, valuation multiples, and composite characteristics; the report discloses the method, but the main content is more of an industry indicator update.

• M&A probability assessmentM&A Rank

  M&A rating framework

  Goldman Sachs rates the probability that covered companies become acquisition targets on a 1-to-3 scale, where 1 indicates high probability, 2 medium probability, and 3 low probability; the report discloses this framework as a general research note.

• Database toolQuantum

  Goldman Sachs proprietary database

  Quantum is used to access historical financial statements, forecasts, and ratios, supporting single-company analysis and cross-company comparisons; the report discloses it as an internal Goldman Sachs analysis tool.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Global steel industry

  Core coverage area

  Strengths

  In April, hot-rolled coil and rebar prices rose broadly across major regions, indicating a short-term improvement in price momentum.

  Weaknesses

  Output and demand indicators are regionally divergent, so the recovery is not even.

  Comparison

  Brazil had the strongest price gains, while the US had the highest price level; China and the Black Sea region had lower price levels.

  Risks

  If demand recovery is insufficient or supply discipline is delayed, the price improvement may not be sustained.

• US steel

  Beneficiary of high prices and improving capacity utilization

  Strengths

  The spot price for hot-rolled coil was the highest in the sample, and April production and utilization both improved month over month.

  Weaknesses

  Rebar prices were almost flat year to date, and some long-product momentum was lacking.

  Comparison

  Relative to China, the Black Sea region, and Japan, US price levels were clearly higher.

  Risks

  High prices could trigger import pressure, demand headwinds, or a subsequent price pullback.

• Brazil steel

  Region with the strongest price momentum

  Strengths

  Monthly and year-to-date gains in both hot-rolled coil and rebar were among the highest.

  Weaknesses

  Whether the price strength can translate into sustained demand and profit improvement still needs to be confirmed.

  Comparison

  Brazil led other major regions in both hot-rolled coil and rebar gains in April.

  Risks

  If regional demand or the macro environment weakens, the strong gains could reverse.

• China steel

  Key focus for supply discipline and policy monitoring

  Strengths

  Both hot-rolled coil and rebar prices rose month over month, and the anti-involution and long-term capacity-cut direction remains in place.

  Weaknesses

  Output fell year over year in the first two weeks of May, and enforcement of capacity and production discipline may be delayed in 2026.

  Comparison

  China's price level is low in the global sample, and the pace of supply-demand repair is weaker than in Brazil and the US, where price gains were stronger.

  Risks

  Insufficient property and macro demand, delayed policy execution, and unstable supply discipline.

• European steel

  Region with month-over-month improvement but year-over-year pressure

  Strengths

  Crude steel output rose 16% month over month in March, and rebar prices rose 6.9% month over month in April.

  Weaknesses

  Crude steel output was down 3% both year over year and year to date, while hot-rolled coil prices were essentially flat month over month.

  Comparison

  European rebar gains were relatively strong, but hot-rolled coil momentum was weaker than in Brazil, Japan, China, and the US.

  Risks

  Weak demand, energy costs, and macro growth pressure may limit price sustainability.

Key data

• April hot-rolled coil price performanceBrazil +10.3% MoM, +20.6% YTD; the US +2.4% MoM, +14.7% YTD; China +2.9% MoM, +7.4% YTDHot-rolled coil prices rose in nearly all sampled regions, with Brazil posting the strongest gains and US spot prices the highest.
• April rebar price performanceBrazil +12.0% MoM, +13.3% YTD; Europe +6.9% MoM, +10.6% YTD; China +2.3% MoM, +7.8% YTD; the US 0.0% MoMRebar prices rose broadly, except in the US where they were essentially flat, with Brazil leading.
• China steel output-3.2% YoY in the first two weeks of MayChina's steel production continued to decline year over year, but the pace of capacity cuts and production-discipline enforcement is believed to be delayed in 2026.
• European crude steel outputMarch +16% MoM, -3% YoY, -3% YTDThe month-over-month improvement was above the historical seasonal average, but year-over-year performance remained weak.
• US steel productionApril average weekly output 7.3Mst, +3% MoM; capacity utilization 79.6%Capacity utilization rose 2 percentage points month over month and 4.4 percentage points year over year.
• Latin American crude steel outputMarch -3% YoY, Q1 YTD -2%, +16% MoMThe month-over-month performance was stronger than the historical seasonal average, but year-over-year output still declined.
• Indian crude steel outputMarch +11% YoYGrowth was above February's +7% and also slightly above the +10% year-to-date level.

Impact & implications

For investment implications, the short-term improvement in steel prices is favorable for the revenue and profit expectations of steel producers, especially in regions such as Brazil and the United States where pricing has been strong; however, delayed supply discipline in China, weak year-over-year output in Europe and Latin America, and uncertainty around macro and property demand mean the quality of the industry's recovery still needs to be validated. Investors should distinguish between price elasticity, cost curves, regional demand, and policy execution timing, rather than becoming broadly optimistic based solely on a single month of price gains.

Risks

• Delayed enforcement of anti-involution and capacity cuts in the Chinese steel industry could weaken the effect of supply constraints.
• Year-over-year crude steel output remains weak in Europe, Latin America, Japan, and the Black Sea region, indicating that regional demand or production still faces pressure.
• A single month's price increase may be driven by short-term inventory, trade, or seasonal factors and may not represent a trend recovery.
• Strong prices in the US and Brazil could face risks from demand pressure, import substitution, or price pullbacks.
• Changes in macro conditions, property demand, and steel trade demand could alter the regional supply-demand balance.

What to watch

• The actual pace of enforcement of steel production discipline and long-term capacity-cut policies in China.
• Whether hot-rolled coil and rebar prices can extend the April gains through May and June.
• Whether US steel capacity utilization can continue to stay near 80%.
• Whether year-over-year crude steel output in Europe and Latin America can turn positive.
• Whether India's high steel production growth can continue and affect the global trade landscape.
• The marginal impact of China's property and macro demand indicators on steel consumption.