Steel associations from around the world are calling for governments to reinforce their work to catalogue and help bring down global overcapacity, in advance of the Global Forum on Steel Excess Capacity (GFSEC) ministerial meeting of Oct. 26, European Steelmakers’ association Eurofer said Oct. 22.
Steel industry associations from the Americas, Europe, Asia and Africa, including the US’ American Iron and Steel Institute, Mexico’s Canacero, The Japan Iron and Steel Association and Russian Steel have renewed their call for governments of steel-producing economies to intensify their work in GFSEC, according to a joint statement released by the associations.
The associations are specifically calling for governments involved in the Forum to: develop stronger disciplines on industrial subsidies and other support measures that contribute to excess capacity and distort markets; uphold effective trade remedies to ensure a level playing field driven by market forces and fair trade; and deepen the analysis of the drivers of steel capacity expansions to expose subsidized or non-market driven investments.
Other priorities highlighted in the statement include: to make a reliable forecast for steel demand in the markets where investments are to be made; boost transparency in industry communications and to
communicate to G20 leaders on the need for expanded efforts to address the growing steel excess capacity crisis.
The associations indicated they were “tremendously concerned” about the recent increase in steel overcapacity at a time when steel demand is severely depressed by the COVID-19 pandemic, which they said has reversed a trend of gradual decreases in overcapacity in the three years after the GFSEC was established (2016-2019).
The associations noted there has been an uneven state of recovery in macro-economic conditions and steel production across the world and highlighted a risk of “potential destabilization” of international steel markets. China, which in recent years has reduced more than 150 million mt of excess steelmaking capacity, has led a global recovery in steel markets following a COVID-19 induced slump in Q1 and Q2, on the back of massive steel-intensive government stimulus.
“Steel industries commend the commitments taken by the members of the steel forum to create transparency in regional market and capacity evolutions and review capacity increases based on the agreed policy principles and recommendations set out in the Berlin Ministerial report,” the associations’ statement said.
— Diana Kinch