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OECD: Excess Steel Capacity Could Reach 721 MMT by 2027
04/03/2025 - Fueled by Chinese cross-border investments, global overcapacity is expected to grow to more than 700 million metric tons by 2027, according to the Organisation for Economic Co-operation and Development (OECD) Steel Committee.
Wrapping up its annual spring meeting in Paris, the committee on Tuesday said there is approximately 165 million metric tons of new projects in the pipeline at a time when global steel demand is projected to grow only modestly in the medium term, impacted by the steep downturn in the Chinese construction sector.
All told, excess capacity could reach 721 million metric tons by 2027, “putting enormous pressures on the viability of even highly competitive steelmakers,” the committee said.
Meanwhile, Chinese steel exports have more than doubled since 2020 and subsidy programs will only likely worsen excess capacity problems, the OECD Steel Committee concluded during its meeting.
In an 1 April statement, the committee said grants, tax incentives, differentiated electricity pricing and below-market borrowing to Chinese steel companies as well as in other countries will trigger further trade disruptions for Steel Committee members going forward.
“Without policy adjustments in countries that are fueling the excess capacity, or disincentives for them to export their surplus steel, global steel industry problems will intensify.”
All told, excess capacity could reach 721 million metric tons by 2027, “putting enormous pressures on the viability of even highly competitive steelmakers,” the committee said.
Meanwhile, Chinese steel exports have more than doubled since 2020 and subsidy programs will only likely worsen excess capacity problems, the OECD Steel Committee concluded during its meeting.
In an 1 April statement, the committee said grants, tax incentives, differentiated electricity pricing and below-market borrowing to Chinese steel companies as well as in other countries will trigger further trade disruptions for Steel Committee members going forward.
“Without policy adjustments in countries that are fueling the excess capacity, or disincentives for them to export their surplus steel, global steel industry problems will intensify.”
