Steel Overload: Why the Planet Needs a Curb on Excess Capacity
According to the fresh OECD Steel Outlook 2025, the world’s steel factories are about to go from “okay” to “oh no!” The report warns that by 2027 we could be squeezed with a staggering 721 million metric tonnes (mmt) of surplus steel—over 290 mmt more than all the OECD countries together produced in 2024. That’s like adding an extra half‑empty steel mill to every city on the planet.
The Bad News
- Demand for steel is flatlining, but output is still marching on.
- Non‑OECD nations—particularly China—are whipping up new capacity like a bad karaoke night.
- Subsidies are pouring in hotter than a candy can’t help you quit the diet.
- China’s steel subsidies are ten times larger than the OECD average.
Exports and the Dutch‑Dutch‑Dutch‑Site
Since 2020, China has doubled its steel exports, hitting a record 118 million tonnes in 2024. This fanfare has turned the European steel market into a chaotic playground, triggering a five‑fold spike in anti‑dumping measures since 2023. The fallout? Companies in OECD nations are feeling the squeeze: profits are back to nearly historic lows, and the job‑loss count sits at a jaw‑dropping 113,000 between 2013–2021.
Decarbonisation? Not So Fast
While the world’s rolling toward greener steel, 40 % of new capacity between 2025‑2027 will likely depend on blast‑furnace / basic‑oxygen‑furnace (BF/BOF) processes—tough on emissions. That threatens the investment pushes into low‑carbon tech, making the sector less green than a freshly watered garden.
Authoritative Words from OECD’s Mathias Cormann
“The outlook shows an urgent need to tackle runaway excess and the distortionary policies feeding it,” declared Secretary‑General Mathias Cormann. “Through evidence‑based dialogue and international co‑operation, we can get back to a fair, efficient, and sustainable steel sector.”
Three‑Step Plan to Save the Steel World
- Structural Reforms – Governments must ditch market‑distorting subsidies that inflame capacity spikes.
- Transparency – More solid disclosure of government support and capacity developments so all can keep the playing field level.
- Co‑operation – A joint push for low‑carbon technologies, wiping out low‑efficiency capacity, and sharing best decarbonisation practices.
In short, it’s high time economies rolled up their sleeves, trimmed the overgrowth, and kept the world’s steel supply from turning into a runaway freight train. The future of our rooftops, cars, and even rockets might just depend on it.
