The Steel Committee of the Organization for Economic Co-operation and Development (OECD) held its 97th session in Paris on March 31-April 1, 2025, where it addressed the ongoing crisis in the global steel industry. The committee highlighted that the global steel excess capacity continues to deepen, with a significant surge in exports of low-priced steel exacerbating the situation.
According to the OECD, China’s steel exports have more than doubled since 2020, reaching 118 million mt in 2024, while the country’s steel imports have plummeted by almost 80% to just 8.7 million mt. This has contributed to a decline in global steel prices and industry profitability, which has hit unsustainable levels in some regions.
The committee pointed out that non-market policies and practices, particularly in economies where steelmaking capacity continues to grow rapidly, are the primary drivers of the current crisis. Chinese subsidization in 2024 is expected to worsen steel excess capacity and trigger further trade disruptions. Without policy adjustments in countries fueling this excess capacity, or disincentives for them to export their surplus steel, the global steel industry’s problems will continue to intensify.
Looking ahead, the OECD forecasts global steel demand to grow only modestly in the medium term, impacted by the downturn in China’s construction sector. Global steel excess capacity is expected to reach 721 million mt by 2027, up from an estimated 602 million mt in 2024, with 165 million mt of new capacity additions projected for 2025-2027.
This expected increase in global excess capacity will put significant pressure on the viability of even highly competitive steelmakers. The committee warned that the ongoing excess capacity problem is reducing industry profitability and limiting the capital available for investment in new technologies, which hampers the steel industry's efforts to decarbonize.
Commenting on the data, Axel Eggert, director general of the European Steel Association (EUROFER), stated, "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."
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