Steel producers in Asia may be among the most affected by the conflict in the Middle East, as the growing energy crisis threatens to halt steel demand and economic growth.
Asian manufacturers suspended their overseas shipments in early March following the joint U.
S.-Israeli offensive and Iran's retaliatory measures, and most of them have yet to return to the market. Some steel shipments from East Asia were diverted to Indian ports after rising oil prices led to higher shipping costs and lengthy diversions.
As with the 2025 Red Sea shipping crisis, ships bound for Europe were diverted from the conflict zone in the Middle East, prompting much talk of an alternative route through the South African Cape of Good Hope. This increases the length of the route by 3,500-4,000 miles, travel time by 10-14 days, and significant costs.
At the same time, customers in the Middle East may have to look for alternative overland transportation routes to supply steel. The tightening of restrictions on steel trade in Europe and North America in recent years has made this region a key alternative export destination for Asian steel producers. In 2025, Chinese manufacturers exported more than 14 million tons of steel to the Middle East, accounting for almost 11% of the country's record annual exports of 119 million tons.
- This article is taken from the March issue of the European Parliament's International Steel Review. The monthly report provides subscribers with information on steel prices, indexes, market commentary, and forecasts from key global steel markets in North America, Europe, and Asia. Contact the MEPs for detailed information on how to subscribe.
The sharp rise in oil prices as a result of supply problems caused by the closure of the Strait of Hormuz has significantly affected the rise in the cost of steel shipments from Asia to Europe. As of March 20, the price of Brent crude oil was 110 US dollars per barrel, having increased by 54% over the month. Additional charges for military risks, soaring prices for marine insurance, and reduced availability of ships as more people move are also complicating transportation solutions. The Drury's World container index showed that the cash rate for the Shanghai—Rotterdam pink shipping route reached 2,478 in a 40-foot container during the week to March 19 – by almost 21% in half a month.
Shipping will also add imported raw materials to the cost of steelworkers. In addition, the conflict is likely to directly affect the supply of Iranian iron to Chinese
