Omnistaal's Perspective on the Recent Steel Market Sell-Off: Why We Remain Bullish for 2025 and Beyond

The recent sell-off in steel stocks, with Cleveland-Cliffs (-13.2%), Nucor (-9.5%), and other major players witnessing steep declines, has understandably stirred market concerns. Reports of President Biden's potential intervention in Nippon Steel's acquisition of US Steel have further fueled sector-wide uncertainty. While this turbulence may seem unsettling, Omnistaal maintains a bullish outlook for the steel market in 2025 and beyond — and here’s why.

The "Nearshoring" Revolution: Asian Manufacturers Moving Closer to Consumers

Manufacturing hubs are shifting. Chinese and Asian producers are no longer relying solely on domestic production facilities to meet global demand. Instead, they are opening new production sites in strategic locations like Türkiye. This is a calculated move driven by one undeniable truth: Proximity equals profitability. By being closer to European, MENA, and African markets, manufacturers can cut transport costs, reduce lead times, and respond faster to market changes.

Why Türkiye?

• Half the distance to everywhere: Positioned as a gateway between East and West, Türkiye’s strategic location allows for cost-effective exports to Europe, the Middle East, and Africa.
• Low Overheads & Skilled Labor: Production costs in Türkiye are significantly lower than in Western Europe, yet quality control remains at the highest standards.
• Faster Time-to-Market: Proximity to consumer markets means Asian manufacturers can deliver in days, not weeks or months, cutting logistical delays and inventory costs.

What This Means for Steel: As more manufacturers shift operations to Türkiye, demand for steel in the region will skyrocket. From construction steel for new factories to specialized steel for production lines, the impact on global steel demand will be profound.

The Global Infrastructure Boom is Unstoppable

While some headlines suggest a "weak global market in 2025," the ground reality tells a different story. From bridges in Europe to mega-cities in Africa, steel demand will continue to surge. Governments and private investors are betting big on new infrastructure to fuel long-term economic growth.

Mega-Projects Driving Steel Demand

• Europe’s Green Infrastructure Push: Billions are being poured into green infrastructure, including wind turbines, solar farms, and energy transition projects. Each of these requires massive quantities of steel for support structures, pylons, and storage facilities.
• Africa’s Urbanization Wave: Nigeria’s $20B railway project, Kenya’s expressway expansion, and South Africa’s energy grid overhaul are just a few examples of how Africa’s rapid urbanization is driving steel demand.
• Middle East’s Giga-Projects: The development and innovation in Middle East is reshaping the global construction landscape. Every skyscraper, bridge, and tunnel being built requires vast amounts of steel.

Omnistaal’s Take: Infrastructure projects have long lead times and are immune to short-term market corrections. We’re actively securing procurement contracts for EPCs and sponsors involved in these major projects. Infrastructure demand doesn’t just disappear; it compounds over time.

Supply-Side Constraints Will Keep Prices Elevated

Unlike previous years, where oversupply weakened prices, today’s steel markets face supply-side constraints that won’t ease soon.

• Environmental Regulations: Green steel production requires new technologies that increase production costs. This "green premium" is here to stay and will prop up prices for years to come.
• Energy Crisis in Europe: The EU’s energy-intensive steel mills are facing rising energy costs. This leads to lower production capacity and, ultimately, tighter supply.
• Capacity Reduction in China: China’s "supply discipline" policy is capping steel production, reducing exports to Europe and the U.S. While global demand remains high, supply will remain tight.

Omnistaal’s Take: With production constraints in Europe and output cuts in China, the supply gap will keep prices elevated. Our procurement teams have seen mills selling out production slots months in advance. Companies that act now to secure contracts will have the advantage in 2025.

Construction & Manufacturing Resilience

Despite bearish sentiment, construction and manufacturing are on the rise. From prefab housing projects to offshore energy developments, the market’s appetite for steel is expanding, not shrinking.

• Offshore Wind Farms: Renewable energy targets in Europe and North America are pushing demand for wind turbines, and each turbine contains 140+ tons of steel.
• Prefab Modular Housing: Countries are racing to solve housing crises, and prefab homes are seen as the solution. Prefab construction requires large orders of steel frames, beams, and fast-assembly components.
• Factory Expansion: With nearshoring taking off, industrial zones in Türkiye, Southeast Asia, and Latin America are driving construction of manufacturing hubs, increasing demand for structural steel and production line materials.

Omnistaal’s Take: Prefab construction is growing at 5-10% annually. Companies that plan ahead to lock in steel procurement contracts now will save millions as modular construction becomes the norm in urban development.

Sentiment-Driven Sell-Offs Rarely Reflect Long-Term Reality

The recent drop in steel stock prices was triggered by sentiment, not market fundamentals. Short-term moves are driven by fear, while long-term moves are driven by reality.

What Actually Happened? President Biden’s decision to block Nippon Steel’s purchase of US Steel created uncertainty. But, it’s important to note this has nothing to do with global demand for steel.

Omnistaal’s Take: Short-term sell-offs provide long-term opportunities. Steel prices are dictated by supply-demand fundamentals, and those fundamentals remain bullish. Don’t follow the market’s mood; follow the contracts, the projects, and the demand.

Unique Challenges in Developing Markets

Many developing nations do not have local production facilities or access to the raw materials needed for steel manufacturing. This leaves governments and infrastructure sponsors heavily reliant on imports (indirectly creating global market demand), often facing several critical challenges:

• Payment Issues: Due to weak banking systems, international payments are delayed, affecting supplier relationships.
• Logistical Bottlenecks: Underdeveloped road, rail, and port infrastructure make it difficult to efficiently transport materials.
• Supply Chain Complexity: Without central coordination, managing multiple suppliers across continents becomes a logistical nightmare.

Omnistaal’s Role: Through our network of suppliers and logistics partners, we address these challenges head-on. Q1 may start slow as procurement managers delay decisions. However, as supply chains begin to show signs of disruption, directors will be forced to act decisively. This is where Omnistaal thrives. We have proven time and time again as the go to for companies to call upon to execute during times of distress and urgency. Our ability to adapt and execute under pressure is a hallmark of our success.

Closing Thoughts

Don’t be fooled by stock market swings. The world’s largest infrastructure projects aren’t slowing down. Prefab construction, civil infrastructure, enhanced logistics, renewable energy, and nearshoring are driving steel demand like never before. Supply is tight. Demand is rising.

The market’s short-term sentiment is irrelevant. The steel industry’s long-term reality is bullish.

A new wave of industry innovators is emerging, driven by the adoption of AI, automation, and advanced data analytics. Companies that embrace these technologies are setting the standard for operational excellence, precision decision-making, and rapid response to market changes. While traditional industry players remain entrenched in legacy systems and old ways of thinking, the true thought leaders are using AI to predict demand, reduce waste, and maximize profitability.

AI-driven market intelligence is no longer a luxury — it’s a competitive necessity. Advanced data systems now allow firms to spot emerging trends, identify risk factors, and preempt disruptions before they occur. This isn't about reactionary moves — it's about proactive, precision-based decision-making.

But the real force behind this transformation is the power of relationships. Real intelligence doesn’t come from a dashboard alone. It comes from the ability to pick up the phone and call the right person. The fusion of human relationships and technology is the game-changer. As the industry shifts, companies that nurture authentic relationships with industry leaders, suppliers, and decision-makers will be the ones driving the future of steel, not following it.

At Omnistaal , we’re helping clients lock in supply contracts, hedge against price hikes, and secure favorable procurement terms for 2025’s demand surge.

If you’re ready to position your business for growth, reach out to Omnistaal .

Don’t react to headlines. Anticipate the future.

[email protected]

www.omnistaal.com