The European Steel Association (EUROFER) has announced that the Global Forum on Steel Excess Capacity ministerial-level meeting has agreed on principles and recommendations whereby countries and regions should dismantle market-distorting subsidies and other government support measures and share data and information on the process of capacity reduction.
EUROFER stated that never before have countries worked together - at a global level - to develop a policy inventory as comprehensive as this one for steel. Although not binding in law, the agreement is a significant step forward as all market-distorting policies and practices beyond World Trade Organization (WTO) rules are targeted.
“We recognize the efforts of China to reduce its massive excess steel capacity. However, these are only the symptoms of a plague of governmental support schemes. Unless these are removed, we will continue to see significant distortions in the global steel industry. EU Trade Defence instruments will continue to be indispensable over the long term so as to level the playing field for EU steel producers, even as countries not party to the agreement - such as Iran - continue to build up supplementary excess steel capacity,” said Axel Eggert, director general of EUROFER.
The OECD estimates that there was nearly 740 million mt of excess capacity in 2016. Global demand for steel in that year was 1.52 billion mt, according to the World Steel Association.