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More than half of the final steel used worldwide was in the construction and infrastructure sectors in 2019, with the mechanical equipment and automotive sectors coming in second and third. Steel is an alloy usually made by combining its main component iron and other elements. The largest steel-producing country today is China, accounting for 57% of the world's steel production by 2020. China will be the first country to produce more than one billion tons of steel by 2020.

As the gloomy demand forecast outweighed the likelihood of supply reduction, steel rebar futures dropped to CNY 3,020 per tonne in late May, touching eight-month lows and following the drop in ferrous metals. The Chinese government announced that it would amend the legislation to forbid the sale of houses before they are finished. If implemented, the regulation would reduce the demand for steel from large purchasers, eliminate a vital source of funding for significant real estate developers, and increase the financial strain on the indebted industry. Foreign demand is also probably going to decline as a result of anti-dumping investigations by key steel importers, such as South Korea, Vietnam, Brazil, Mexico, and South Africa. When local demand slowed, companies had to turn elsewhere to achieve their sales targets, therefore exports became a major source of steel bidding for Chinese mills. Consequently, industry groups backed rhetoric from Beijing that it would deploy a steel output mandate, with Baosteel hinting at a national output cut of 50 million tonnes this year.

The World Steel Association (worldsteel) publishes its Short-Term Outlook (SRO) for 2022 and 2023. Worldsteel estimates that steel demand will grow by 0.4% in 2022, reaching 1,840.2 million tons after a 2.7% percent increase in 2021. In 2023, steel demand will increase by 2.2% to reach 1,881.4 million tons. Current projections are made against the backdrop of the war in Ukraine and are subject to high uncertainty.