Steel excess capacity increased to 640 million metric tonnes in 2025, exceeding total Organization for Economic Cooperation and Development steel production by more than 200 million mt, and is projected to continue rising through 2028, the OECD’s Steel Committee said March 24.
According to the organization, global steelmaking capacity has increased for four consecutive years, reaching a new high of 2.45 billion mt in 2025, with the OECD area contracting while non-OECD economies recorded growth during this period.
India and Southeast Asia have been significant drivers of the Asian capacity expansion, supported by relatively strong demand growth and, in the case of Southeast Asia, inward foreign direct investment.
China’s share of global excess capacity rose during 2025, surpassing 50% in the latter part of the year, resulting in higher exports to international markets, the OECD said. China’s annual exports have nearly doubled over the last three years, with its 131 million mt export volume last year surpassing the combined exports from the rest of Asia for the first time in recent history.
“This excess capacity is putting enormous pressure on international markets by displacing production in the committee’s member countries, driving prices and industry profitability down,” Sheryl Groeneweg, chair of the OECD Steel Committee, said in a statement.
Circumvention concerns
Steel Committee members reviewed their trade policy actions, noting that exporters continue to develop new and increasingly sophisticated methods of evading steel tariffs, highlighting the need to strengthen trade enforcement.
In 2025, a total of 75 antidumping and countervailing duty investigations were initiated, and the stock of steel AD/CVD measures rose. Despite these efforts to safeguard steel industries, the effectiveness of OECD members’ trade actions is being hampered.
Based on a new dataset covering over 260 product-level and country-level cases, new work discussed by the committee reveals significant transhipment activity between China and some Southeast Asian countries of steel subject to trade measures taken by OECD countries.
The latest data show that, in 2024, the median Chinese firm received 15 times more subsidies relative to its asset size than the median firm elsewhere, up from 10 times more in previous years, the OECD said. Moreover, China’s steel subsidy rate has nearly doubled since 2019, a trend that will sustain excess capacity in the years ahead absent fundamental structural reforms, the OECD said.
Platts, part of S&P Global Energy, assessed SS400 HRC of 3 mm thickness at $477/mt FOB China on March 24, unchanged day over day. The same grade was assessed at $520/mt CFR Southeast Asia, unchanged over the same period.
Author: Annalisa Villa
