OECD Raises Alarm Over Excess Steel Capacity

The Organization for Economic Co-operation and Development’s Steel Committee expressed concern over unbalanced steel market conditions in a new report following its 88th Session last week. Steel capacity continues to increase despite a slump in demand caused by the global pandemic. The OECD says global steelmaking capacity is expected to increase to 2,455.8 million metric tons in 2020, resulting in excess production of 700 million tons.

Although most steel-producing economies experienced significant contraction in production due to the impacts of COVID-19, steel production in China hit record volumes in the first half of this year. Additional capacity coming online in the Middle East and Asia will compound the problem, says the organization. New capacity projects were begun with expectations of stronger market demand, including the export market, which may not occur, says OECD.