Global Groups Keep Focus on Capacity Issues
By Dan Markham
on Oct 12, 2021
Global steel overcapacity is probably not a problem many of you have given a lot of thought to lately. The yearlong supply crunch, and corresponding price surge, has made thoughts of excess steel not as pressing a problem as it’s been in the past.
But the bizarre conditions, or pricing, of 2021 are not likely to last forever, and sometime soon the rest of the steel world will be again wondering what can be done about it. A few global groups, however, haven’t suffered the same kind of short-term memory loss on the topic.
In late September, the OECD Steel Committee met, and again global excess capacity was at top of mind. “The committee expressed concerns that the significant and persistent non-market structural overcapacity, with recent indicators showing an estimated global capacity-production gap of 478 million metric tons in 2021, may trigger sharp downturns in the future when steel demand growth loses momentum,” the group reported.
A week later, an organization whose mission is unmistakable met and came to a similar conclusion. "We need multilateralism more than ever to address urgently steel overcapacity,” said Italian Minister of Foreign Affairs and International Cooperation Luigi Di Maio, in his opening speech to the Global Forum on Excess Steel Capacity. Di Maio also expressed his wish that “non-participating steel producing Countries join the dialogue on steel policy.”
Right now, this kind of talk sounds like dire warnings of an impending snowstorm in the middle of a heat wave. But these groups will surely insist the structural issues involving overcapacity haven’t disappeared just because it has been a challenge to secure flat-roll in the past 12 months.