OECD warns of deepening global crisis in the global steel industry

The global crisis in the global steel industry is being exacerbated by the non-market policies of the Chinese authorities, which continue to provide grants, tax breaks, preferential electricity prices and loans on non-market terms to steel companies there. All this leads to a worsening of the problem of overcapacity in the global steel industry and causes further trade disruptions.

This is stated in the statement of the 97th session of the Committee on Steel of the Organization for Economic Cooperation and Development (OECD).

As noted, the global crisis in the steel industry has deepened due to the growth of global overcapacity in the steel industry and a surge in cheap steel exports. China’s steel exports have more than doubled since 2020, rising to 118 million tons in 2024. At the same time, steel prices and industry profitability continued to fall over the past year, reaching historically low and unacceptable levels in some regions.

“Without adjustments to policies in countries that fuel overcapacity or impede the export of excess steel, the global steel industry’s challenges will intensify,” the statement said.

The Steel Committee expects global overcapacity in steel production to continue to grow. It is expected to rise to 721 million tons in 2027 from 602 million tons in 2024, which will put enormous pressure on the viability of even highly competitive steel producers. In particular, in 2025-2027, it is planned to increase new capacity by 165 million tons due to cross-border investments by Chinese steel companies.

At the same time, efforts to decarbonize the global steel industry are facing obstacles, the statement said, The current problem of overcapacity reduces the profitability of the steel industry and the capital available for investment in new technologies, hindering the industry’s decarbonization efforts.

The Committee called for accelerated work on the root causes of the global steel crisis and to use the results for international efforts to develop solutions to this situation, including the Global Forum on Steel Overcapacity.

Stanislav Zinchenko, CEO of GMK Center, also spoke at the 97th session of the OECD Steel Committee. He presented the vision and research of GMK Center and delivered a report on

• the state of the Ukrainian steel industry and its importance for the economy;
• challenges facing the Ukrainian steel industry;
• prospects for Ukrainian capacities;
• prospects for decarbonization of the Ukrainian steel industry.

The OECD Steel Committee, held in Paris on 31 March and 1 April, brought together about 300 government and industry representatives from more than 40 countries with the largest steel industry. For the second year in a row, the session on the state and prospects of Ukraine’s steel industry opened the meeting, which emphasizes the importance of Ukrainian steel industry on the international level.

As previously reported, the OECD Steel Committee expressed concern about the distortion of the steel market due to unfair competition and growing trends in trade protection circumvention.

The OECD expects global GDP growth to slow to 3.1% in 2025 and 3% in 2026. The organization sees a threat to the global economy in the growth of geopolitical and political uncertainty, as well as further fragmentation of global trade.