At its 87th session held in Paris, on September 26-27, 2019, the Steel Committee of the Organization for Economic Co-operation and Development (OECD) discussed the challenges facing the global steel industry and policies to promote adjustment and ensure a fair playing field in the sector. The committee also discussed in detail the outlook and future of the steel sector, excess steelmaking capacity, steel trade policy developments, steelmaking capacity investments and the importance of mergers and acquisitions, and of facilitating the exit of inefficient producers.
During the session, delegates highlighted the fact that, according to the latest data, there was an increase in global steelmaking capacity in the first half of the current year, to an annualized level of 2.29 billion mt. As there are no additional capacity closures expected through the remainder of 2019, global capacity would increase this year for the first time since 2015. Furthermore, the gap between global capacity and production extended to almost 440 million mt in the first half of this year, while there are still new projects to come. The committee expects global steelmaking capacity to increase by 2-3 percent within 2020-22. The delegates stated that effective actions and measures should be taken worldwide for excess capacity and its negative impacts, and that excess capacity should be eliminated.
Another topic that has been discussed in detail was the fact that the steel trade is following a downward movement. The committee stated that in 2018 steel trade declined further with global steel exports falling by 5.2 percent or 14.4 million mt year on year. In the first quarter of 2019, world steel exports fell further by 2.6 million mt as compared to the same period of 2018. The committee said that this decline is triggered by steel trade measures, mainly by the ones applied to key steelmaking raw materials. Another factor that affects the steel trade is said to be the policies to promote the growth in capacity, according to the committee.