With minimal fanfare for such an important undertaking, the newly-formed Global Forum on Steel Excess Capacity held its first meeting in Berlin on 16 December.
The initiative was agreed to by the G20 leaders at the Hangzhou Summit in September 2016 and further discussed at the OECD steel committee meeting in the same month (see Kallanish passim).
The Forum is chaired by Germany with China and the US as co-chairs. Over thirty steel producing countries are participating, representing over 90% of global steel production.
In its latest monthly report on global crude steel output, the World Steel Association calculates current worldwide crude steel capacity utilisation ratio of its 65 reporting countries in October 2016 at 69.6%. It was 68.2% in October 2015. This already implies more than 30% overcapacity.
China, with currently 50.2% of global crude steel output, has been following its own steelmaking capacity reduction programme throughout 2016. A key element in this is the closing down of unofficial and therefore ‘illegal’ induction furnaces. The Catch-22 here is that, because the production is unofficial, it is unlikely to be recorded in government statistics.
This is probably why, according to worldsteel data, Chinese crude steel output at the end of October was actually up by 4% year-on-year.