Global steel market conditions continue to deteriorate as excess capacity reaches new highs and trade distortions intensify, according to conclusions from the 99th session of the OECD Steel Committee.
The meeting brought together nearly 300 government officials, industry representatives and trade unions from 42 delegations to assess market developments and policy responses.
Delegates highlighted that global excess steel capacity rose to around 640 million tonnes in 2025, exceeding total OECD production by more than 200 million tonnes. Total global steelmaking capacity has increased for four consecutive years, reaching approximately 2.45 billion tonnes.
A key driver of market pressure remains China, whose share of global excess capacity exceeded 50% in 2025. As domestic demand declines, Chinese producers have increased exports significantly, reaching around 131 million tonnes last year — nearly double the level of three years ago and surpassing the combined exports of the rest of Asia.
According to the Committee, this surplus production is weighing on global prices and profitability, displacing output in other regions and contributing to job losses in market-oriented economies.
Global steel demand has declined for four consecutive years, with the contraction exceeding 2% in 2025. While moderate growth is expected in 2026, the outlook remains uncertain, particularly in light of geopolitical tensions and energy market volatility.
Regional trends differ significantly. Demand in China is expected to continue its structural decline, while OECD economies may see a partial recovery after a 1.5% contraction in 2025. Stronger growth is projected in India, Southeast Asia and parts of the Middle East and North Africa.
Trade policy was another central focus. While measures such as antidumping and countervailing duties have been expanded — with 75 new investigations launched in 2025 — their effectiveness is increasingly undermined by circumvention practices. These include transshipment, minor product modifications, overseas investments to change origin, and exports of steel-intensive downstream products.
The Committee also pointed to rising subsidy levels, particularly in China, where support measures have increased significantly in recent years. New provincial and municipal programmes introduced in 2025 were identified as contributing to ongoing market distortions and sustaining excess capacity.
Delegates stressed that current policy tools are not sufficient to address the structural imbalance in the global steel market. In response, the Global Forum on Steel Excess Capacity (GFSEC) is working on a new framework for coordinated international action, with initial proposals expected by mid-2026.
The Committee also underlined the importance of secure and affordable energy and raw materials supply, as well as the need to maintain investment in innovation and low-carbon steel production despite ongoing market pressures.
Source and Photo: OECD
