Steel excess capacity hits global markets

Global steel excess capacity continues to grow, driven by increasing subsidies in some major non-OECD steel-producing economies, while efforts to restore fair competition are increasingly undermined by circumvention of trade measures aimed at levelling the playing field, according to a new OECD (Organisation for Economic Co-operation and Development) report. Working with over 100 countries, the OECD is a global policy forum.

The ‘OECD Steel Outlook 2026’ projects global steel excess capacity to reach 745-million tonnes by 2028, exceeding the OECD’s current steel production by 319 million tonnes. Planned capacity additions of up to 139-million tonnes through 2028 represent a 5.7% increase from 2025 levels, while demand growth is expected to remain subdued at around 0.9% per year.

“Most new capacity is being added outside the OECD, often with government support. In 2024, the median Chinese steel firm received 15 times more in subsidies, relative to their total assets, than producers elsewhere, up from ten times in 2023. Chinese steelmakers exported a record 131 million tonnes in 2025, a 153% increase from 2020 and more than the European Union’s total steel production in 2025,” commented the OECD.

“Excess steel capacity creates problems for everyone. It distorts global markets and hurts economic security and resilience. It also discourages innovation and sustainability,” OECD Secretary-General, Mathias Cormann, said. “We need to tackle the root causes, including harmful subsidies and other non-market practices. That means stronger international cooperation. A level playing field for steel producers everywhere.”

To read the rest of this news item in the June 2026 issue of ISMR, see https://joom.ag/mVKd/p6