With the reactivation of the Global Forum on Steel Excess Capacity (GFSEC), the European Steel Association (EUROFER) has called for an intensification of the forum’s ongoing work. "The EU steel industry had already reduced its steel capacity by over 22 million tonnes during the past ten years, while at the same time other regions continued to install new, export-oriented capacity that the world simply does not need," said Axel Eggert, director general of EUROFER. The formal GFSEC meeting is taking place on July 8-9, while steel stakeholders met earlier this week, on July 7.
EUROFER underlined that both developed and developing economies are experiencing demand decreases of between 10 percent tand 11 percent as a result of the coronavirus pandemic. The expected global fall in steel demand is six percent for the year, the association added.
"The EU market was hit much more severely by the crisis, following already weak market conditions in 2019”, said Mr. Eggert. "As a result of the sudden collapse in EU steel demand, EU steel production has been cut drastically, by about 28 percent from mid-March to date, while at the same time cheap offers at our borders are depressing prices, jeopardising any sustainable recovery. The depression in demand has worsened the existing problem of global excess capacity, particularly as some regions continued to increase production, notably China." That is why "EUROFER, together with regional steel industries, are calling on governments to intensify the ongoing work of the GFSEC."
EUROFER has asked for intensive monitoring of the evolving situation of global overcapacity in light of demand per region, and said that "China should come back to the table." China, which represents over 50 percent of world steel capacity and production exited the GFSEC at the end of 2019.