Steel Committees 98th Session: Vice-Chairs Statement

Excess capacity-driven steel exports' surge needs urgent action

Statement by Ms. Sheryl Groeneweg and Mr. Lieven Top,

Vice-Chairs of the OECD Steel Committee

98^th session, 4-5 November 2025, Paris

Delegates exchanged information on the pervasive use of non-market policies and practices by some countries that are distorting steel prices, reducing the steel market shares of member countries, creating severe trade disruptions, and leading to national and economic security risks. Concerns are intensifying amid a continued surge in Chinese steel exports, which have increased by a further 10% this year, reaching new record levels after doubling between 2020-2024. Steel workers and businesses in market-oriented economies are being displaced. The effects on the financial performance of firms have been pronounced, with nearly a fifth of the projects involving existing and new lower-carbon emissions in the pipeline now on hold and investments for upgrading and maintaining competitive facilities at risk. Members discussed their policy responses and ways that they could be made more effective to address these shared challenges.

Key conclusions from the meeting include:

• International steel market conditions have weakened since the Committee last met in the spring, though the downturn is starting to moderate. Following three consecutive years of contraction from 2022 to 2024, global steel demand appears to be bottoming out in 2025. Projections for 2026 indicate a modest recovery of just over 1%, which would return global demand to its 2022 level. While demand in China is expected to decline sharply, developed economies are poised for a gradual rebound. In contrast, India, ASEAN nations, and other developing economies continue to show relatively strong growth prospects.
• Global steel excess capacity is increasing this year at its fastest pace since the 2009 global financial crisis and could surpass 680 million metric tonnes (mmt) [With the exception of 2022, when the COVID pandemic and the resulting drop in global steel demand led to an exceptionally significant boost in global steel excess capacity by nearly 95 mmt that year.] Global steelmaking capacity has risen for seven consecutive years and the OECD projects it to reach 2,547 mmt by the end of 2025. Asia-particularly India and the ASEAN economies-and the Middle East have been a key source of capacity growth in recent years. Planned projects globally indicate that an additional 109 mmt could become operational by 2028, reaching a record-high level of around 2,656 mmt. Most of these projects are concentrated in Asia. In China, while steel capacity replacement rules are being tightened, enforcement challenges raise questions regarding the possibility of further net capacity increases. At the same time, Chinese steel companies, including state-owned enterprises, continue to invest in steel projects overseas, especially in ASEAN and Africa.
• Severe disruptions in steel trade due to global excess capacity continue to affect steel producers, despite the increased use of trade measures. The structural decline in Chinese steel demand is pushing its domestic steel producers to export record volumes of steel rather than undertake market-oriented reforms and remove such capacity, thereby reshaping international trade flows via different channels. After reaching a record-high level of 118 mmt in 2024, Chinese steel exports in the first half of 2025 increased by a further 10% compared to the same period last year. The resulting trade overflow has depressed financial conditions for most steel producers worldwide. In many economies, increased recourse to trade actions has curbed flows of finished products. Chinese mills, however, have responded by expanding shipments of semi-finished and lower-value products, which are less exposed to such measures. This shift has allowed overall export volumes to remain elevated, while leaving less protected markets - particularly in Asia, Africa and Latin America - more vulnerable to displacement and price competition.
• Non-market policies and practices continue to severely distort steel markets and are the source of the steel trade disruptions occurring around the world. The Committee's regular monitoring work shows that government support measures including market-distorting subsidies are increasingly prominent in regions where steelmaking capacity is rapidly expanding, such as in the Middle East and North Africa (MENA), China, and ASEAN. The Committee's latest monitoring exercise shows that common channels of support in MENA include subsidised energy, tax and customs exemptions, concessional loans, preferential treatment of SOEs, preferential public procurement and local content requirements. Such subsidies have significant adverse effects on members' steel industries. The Committee reviewed its latest impact analysis that provides robust evidence that subsidised firms in non-member economies increase their market shares to the detriment of competitors in member countries. These subsidies blur market signals, keep less profitable and cost-efficient firms in the marketplace, and crowd out the needed private investment that member economies' industry needs to remain viable.
• Industry efforts to move towards lower emission production are stalling. Several announced projects, corresponding to 19% of the total expected lower-carbon project pipeline until 2027, have been put on hold amid trade policy shifts and worsening global excess capacity effects. Work by the Committee shows that excess capacity is impairing the ability of companies to conduct the necessary research and development activities, slows their investment in the deployment of lower-carbon technologies at commercial scale, and hinders the development of markets for lower-carbon products. It does so through its impact on prices and profitability. Addressing the global structural problem of excess capacity and levelling the playing field would foster improved business conditions that would support the industry's efforts to innovate and invest in new technologies for greater efficiency and lower emissions.
• Members support ongoing work towards more coordinated actions to address the impacts of the steel crisis. Participants welcomed the political commitment made at the Ministerial Meeting of the Global Forum on Steel Excess Capacity (GFSEC) on 10 October to address the root causes and negative effects of global steel excess capacity. Ministers tasked the GFSEC to begin developing the foundation for a comprehensive framework for joint action to address the global steel crisis at a working-level meeting held back-to-back with the 98^th session of the Steel Committee, with a view to agreeing on key elements by June 2026. To support these efforts, Steel Committee members discussed the effectiveness of their trade policies and engaged together and with stakeholders to see how like-minded countries could coordinate their activities in ways that would make their trade measures more effective over the longer term. Members also discussed their future work programme, noting that they would need to intensify their efforts to address the factors that are distorting markets and contributing to the perpetuation of global excess capacity, to support the policy actions of the GFSEC.