OECD Steel Committee concerned about excess capacity in steel sector
Low growth prospects for the global economy, slowing demand for steel and virtually unchanged steelmaking capacity are driving severe and persistent excess capacity in the steel sector, the OECD Steel Committee said at the end of its meeting this week. The Committee reiterated the need for capacity reductions in relevant economies and for the removal of subsidies and other support measures that are distorting steel markets.
The Committee said that if planned new steel plants, some in regions where excess capacity is already prevalent, become operational, global steelmaking capacity could increase by 4-5% between 2019 and 2021. It called for the G20-led Global Forum on Steel Excess Capacity to swiftly implement agreed policy actions to eliminate excess capacity and market-distorting support measures, and expressed support for the continuation of the Forum’s work.
The Committee also discussed recent trade measures affecting steel and steelmaking raw materials, with several delegations expressing concern about the impact of certain trade measures on steel trade flows, as well as the effect of these measures in prompting trade measures in other jurisdictions.
Source: Organization for Economic Co-operation and Development
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