Steel under pressure: OECD forecast shows future volatility
The OECD has published its annual steel market forecast for 2025, which provides a comprehensive and sober analysis of the current dynamics of the global steel industry and medium-term trends.
The report highlights ongoing structural challenges that continue to put serious pressure on the sector, including the return of excess production capacity, slowing global demand, increased trade tensions, and increased competitive imbalances caused by non-market practices.
The OECD forecasts a 6.7% increase in global steel production capacity (165 million tonnes) between 2025 and 2027, with Asia (particularly China and India) accounting for almost 60% of this growth. At the same time, global demand is expected to grow by only 0.7% per year, with a decline in China, stability in the OECD countries, and stronger growth only in selected developing regions such as ASEAN and MENA.
As a result, the level of capacity utilization may decrease again, leading to oversupply, which previously led to a sharp drop in prices and financial pressure on even the most efficient producers.
The report confirms that non-market policies and subsidies continue to distort the playing field, especially in China, where government support for steel mills is ten times higher (relative to income) than in OECD countries. This support allowed a sharp increase in Chinese exports, reaching 118 million tons, triggering a wave of trade protection measures.
In 2024 alone, 81 anti—dumping investigations were launched worldwide - almost five times more than in the previous year — in Asia. The report warns of the growing practice of circumvention of requirements, when products are redirected or modified to circumvent trade barriers.
The report also warns that excess capacity is undermining the steel sector's ability to invest in decarbonization technologies. More than 40% of the new capacities expected to be commissioned by 2027 will be installed in a traditional way with high greenhouse gas emissions. While many companies are exploring low-carbon alternatives (such as hydrogen-based DRI or carbon capture), unequal access to renewable energy and high-quality iron ores could change future production and trade flows.
The OECD emphasizes that international cooperation, both between governments and within the industry, is essential to restore market balance, increase transparency, and support the transition to a competitive green economy.