Global overcapacity requires immediate response – EUROFER

Combating overcapacity requires immediate comprehensive trade measures. This is stated in a statement by the European Steel Association (EUROFER) following the meeting of the Global Forum on Steel Overcapacity (GFSEC).

As noted, the consequences of this destructive dynamic, which distorts the global steel market and threatens thousands of jobs in Europe alone, must be overcome as a matter of urgency.

According to EUROFER Director General Axel Eggert, a robust strategy is needed that focuses on concrete actions that GFSEC countries can take, including unilateral trade measures.

“Insisting on keeping markets open only benefits those countries that have withdrawn from the global forum and those that continue to export surplus steel, either in response to crippling import surges or in denial of their own excess capacity,” he said.

Trade measures, according to Eggert, should be comprehensive and cover the entire range of products and countries, as overcapacity is a global problem. He also reminded that a large number of countries have already imposed duties on steel imports.

According to new data from GFSEC, global excess steel capacity will reach 630 million tons by 2026, which is five times higher than the EU’s steel production in 2023. According to EUROFER, this unprecedented challenge threatens the economies of open market regions, including the European Union. An oversupply of carbon-intensive steel at low prices distorts markets and undermines competitiveness and decarbonization efforts.

“European steel producers are investing billions of euros in decarbonization, but these efforts risk being undermined by the additional overcapacity that is projected to come online by 2026. For every one million tons of lost production capacity in the EU, an equivalent volume of imports is coming to our market. We need extraordinary measures to contain the side effects of global overcapacity and a structural solution to address its root causes,” summarized EUROFER’s CEO.

As GMK Center reported earlier, the fight against overcapacity requires mutual support. Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine, voiced this position of the Ukrainian side following the GFSEC meeting. In particular, it is necessary to review protective trade measures against countries participating in the global forum.