At its 97th session held on March 31-April 1, 2025 in Paris, the Steel Committee of the Organization for Economic Co-operation and Development (OECD) discussed the current crisis in the steel industry and its main causes.
The committee stated that the global steel industry crisis has deepened due to growing global steel excess capacity and the resulting surge in exports of low-priced steel. Accordingly, China’s steel exports have more than doubled since 2020, surging to 118 million mt in 2024, while the country’s steel imports have decreased by almost 80 percent to 8.7 million mt. Global steel prices and industry profitability continued to decline during 2024, hitting unsustainable levels in some regions.
Noting that non-market policies and practices, which are the main causes of the current crisis in the steel industry, continue unabated in some economies where steelmaking capacity is growing rapidly, the committee found that significant Chinese subsidization in 2024 will worsen steel excess capacity problems and trigger further trade disruptions going forward, adding that global steel industry problems will intensify without policy adjustments in countries that are fueling the excess capacity, or disincentives for them to export their surplus steel.
Regarding the market outlook, the committee forecasts global steel demand to grow only modestly in the medium term, impacted by the downturn in the Chinese construction sector. Global steel excess capacity is expected to reach 721 million mt by 2027 from an estimated 602 million mt in 2024, with 165 million mt of new capacity additions projected for 2025-27. Noting that the expected increase in global excess capacity will put significant pressure on the viability of even highly competitive steelmakers, the committee added that the ongoing excess capacity problem is reducing the steel industry’s profitability and the capital available for investing in new technologies, hampering the industry’s efforts to decarbonize.
Commenting on the data issued by the OECD, Axel Eggert, director general of the European Steel Association (EUROFER), said, “This unsustainable situation points to the shortcomings of the EU safeguards where the growing disconnection between imports allowed into the EU market and actual demand cannot be addressed. The European Commission must deliver as soon as possible on a post-safeguard trade measure with a highly effective level of protection as envisaged in the European Steel and Metals Action Plan.”