Excess production capacity will continue to put downward pressure on global steel prices, regardless of harsh import duties in the United States, trade protection measures, or steel production cuts.
The panelists in the MEPs' latest podcast "Talking about Steel"[/url]concluded that low global demand for steel, combined with rising production in developing countries, will contribute to supply continuing to exceed demand in the coming years.
Kay Ayub, Head of Price Analysis and Forecasts, Evan Gilfillan, a leading data analyst, and John Carruthers-Green, an analyst at the steel market, joins Tom Sharp, editor-in-chief of the MEP, in the latest issue of Talking about Steel magazine.
"Excess capacity is going to be a problem for the next five, 10, 15 years," Carruthers-Green said in an interview with the new Speaking of Steel podcast, titled "Excess capacity can lead to falling steel prices."
He added: "It won't happen quickly unless there are big announcements, and that will mean that there will be a lot of jobs and a lot of factories will close."
Watch the full episode by clicking on one of the links below.
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Gilfillan shared his opinion on the problem of excess steelmaking capacity in the world based on the OECD forecast for steel production 2025 in the podcast "Talking about Steel". The report highlights that while OECD countries reduced their steelmaking capacity by 0.2% between 2019 and 2024, non-OECD countries increased their capacity by 3.4%.
This trend will continue. Global excess steelmaking capacity is projected to reach 721 million tons by 2027, up from about 600 million tons in 2024, which is 290 million tons higher than the total steel production in all OECD countries.
Efforts are underway to reduce production in China, which accounted for more than 55% of global production in April, according to worldsteel. Even if these efforts are successful, the drive for economic growth in other countries, particularly India, will continue to increase oversupply. In addition, about 40% of the 165 million tons of additional production capacity planned to be increased between 2024 and 2027 depend on high-emission blast furnace technology.
Ayoub said that the continued excess production capacity in low-cost, growth-driven countries would ensure a "steady flow of imports" to the United States and the EU, despite any increase in tariffs, duties, or emissions-based import regulations such as those adopted by the EU Regulatory Mechanism.
