The committee, which wrapped up its annual March meeting on Tuesday, said Russia’s invasion of Ukraine and many other factors are continuing to dampen worldwide steel demand. 

“The deterioration in international steel market conditions is being driven by the global economic slowdown, historically high inflation worldwide, the impacts of Russia’s aggression against Ukraine, and an ailing Chinese real estate market that has depressed steel demand in the world’s largest steel-consuming economy,” OECD steel committee vice chairs Sheryl Groeneweg and Lieven Top, said in a statement. 

“Rising interest rates and the tightening of monetary policy, sustained high inflation, weak consumer spending and elevated energy prices are likely to keep steel demand subdued going forward,” they added. 

But even while the outlook for demand growth appears weak, the gap between production and capacity increased 22% to 632 million metric tons in 2022, driven in part by significant capacity expansions in Southeast Asia and the Middle East. 

“The modest longer-term outlook for steel demand growth risks exacerbating these challenges,” they said.