Sector Insight

The global steel industry moved through a challenging period in 2025 and Q1/2026, facing multiple headwinds, including: (1) rising trade protectionism worldwide; and (2) pressure from low-priced steel exports and persistent supply-demand imbalances in China. However, the Chinese government has applied supply-side tightening policies to curb excessive competition, aiming to alleviate domestic overcapacity. Amid rising raw material costs caused by supply disruptions linked to the Middle East conflict, together with China's supply discipline efforts, global steel prices are expected to record a modest increase in 2026.

In Q1/2026, domestic demand remained the key growth engine for the steel sector, while exports were weighed down by global tariff uncertainties. Meanwhile, Vietnam strengthened trade protection policies through anti-dumping duties on imported steel, providing support for domestic producers.

In 2026, key drivers supporting the recovery of the steel industry include: (1) the continued rebound of the real estate sector, supported by improving legal frameworks and government efforts to contain interest rate increases; (2) accelerated development of major infrastructure projects; (3) expected margin expansion driven by the recovery in domestic steel prices; and (4) trade protection measures that help ease competitive pressure from imported steel products. Nevertheless, we believe the ongoing wave of global tariff barriers could weigh on export volumes across the industry.

Investment opportunities: HPG