At the 76th Organization for Economic Co-operation and Development (OECD) Steel Committee meeting held in Paris on June 5-6, the participants discussed the slow growth prospects of the global steel market and risks surrounding the outlook. Macroeconomic risks are overall better balanced although still tilted to the downside. These risks include financial tensions in emerging markets that can have bigger spillovers than anticipated, falling inflation in the euro area and geopolitical risks that have also increased since the start of the year.
OECD steel committee members stated their interest in and concern about policy developments that have contributed to global excess steel capacity. Specific concerns related to government steel policies include continued government subsidies (notably subsidies for the creation of new capacity or the maintenance of inefficient capacities), continued approvals for new steel facilities, the manipulation of border measures, the activities of government financial agencies, and other government interventions.
The OECD stated that the global steel trade has undergone significant fluctuations over the past few years. World export activity has nearly recovered from the financial crisis of several years ago, but the trade performance of individual economies has differed widely. Some regions that have traditionally been large net importers of steel are investing rapidly in new steelmaking capacity, a trend that is gradually leading to reduced demand for imports.
Members noted that trade-restrictive measures continue to be applied frequently in the steel industry. Recent developments with potentially important implications for steel trade flows include, for example, tightened behind-the-border measures, tariff increases, certain quota measures, imposition of localization barriers, and frequent recourse to safeguard measures. Unfair trade practices can in some cases lead to increased imports.