At the 83rd Organization for Economic Co-operation and Development (OECD) Steel Committee meeting held in Paris, September 28-29, the Steel Committee stated that global steelmaking capacity is showing some signs of slow adjustment to lower levels of demand, according to the latest information available to the OECD Steel Committee Secretariat. This modest adjustment falls well short of alleviating global excess capacity significantly. Excess capacity remains a major challenge to the global steel industry, with implications for the financial and economic sustainability of the sector and international trade. The Committee reiterated the urgency of addressing the excess capacity problem, including by removing any forms of market-distorting government support that result in capacity additions or barriers to capacity closure, by enhancing market mechanisms in the steel sector.
According to the Steel Committee, the OECD has marginally revised downwards its 2016 figure for world crude steelmaking capacity from 2.38 billion mt to 2.36 billion mt to incorporate closures that were not taken into account previously. The net capacity change in the first half of 2017, i.e., taking into account new capacity additions and closures in OECD and non-OECD economies, brings current global steelmaking capacity down to a level of 2.35 billion mt, representing a slight decrease (-0.6%) from the level prevailing in 2016. Developments in steelmaking capacity have been evolving rapidly and there are some uncertainties and a lack of information with respect to investment and closure information.