Ahead of the Global Forum on Steel Excess Capacity ministerial-level meeting which will open tomorrow, November 30, Axel Eggert, director general of the European Steel Association (EUROFER), has stated that global overcapacity in steel production - estimated by the Organization for Economic Cooperation and Development (OECD) to have been north of 700 million mt in 2016 - is a symptom of a disease. According to Mr. Eggert, there is a pestilent mix of market distortions caused by policies in a number of steel-producing regions that impair market functioning, including direct and indirect subsidies, government support measures and distortive financial arrangements.
Accordingly, EUROFER calls for a commitment from all members of the Global Forum to refrain from market-distorting subsidization and other government support measures related to steel capacity and production. Member governments need to foster a genuine, global level playing field, and facilitate adjustment in each steel-producing region, thereby reducing overall excess capacity. “This situation cannot continue. It is not sustainable. The Global Forum must reach a concrete arrangement that will tackle the plague of global overcapacity,” stated Mr. Eggert.
The meeting is expected to deliver a report setting out the excess capacity situation in the global steel industry and define guidelines and concrete policy solutions as a basis for swift action to address the problem. The Global Forum on Excess Steel Capacity was established as the result of calls made at the September 2016 G20 meeting in China.