23/03/2021 - The OECD Steel Committee expressed deep concern as it met this week over the deterioration in steel market conditions related to the COVID-19 crisis, and agreed to accelerate work to build a comprehensive database of government support provided to steel producers in major steel-producing economies.
A statement by the Steel Committee Chair said the pandemic had accelerated the decline in global trade of steel, with a sharp downturn in exports in the second and third quarters of 2020. The slump in demand for steel has taken place amid increases in steelmaking capacity, which may not reflect market fundamentals, the statement said. Committee members reiterated the need for capacity reductions, including by facilitating the exit of inefficient producers in relevant countries while supporting workers affected by plant closures. The statement said government subsidies and other support measures and interventions had also led to distortions in steel trade flows and contributed to trade tensions.
The latest OECD data show that global steelmaking capacity increased to 2,453.2 million metric tonnes (mmt) in 2020, and the gap between global capacity and production widened to 625.4 mmt. Global demand is likely to only partially recover in the near term, with the level of demand for finished steel in 2021 expected to remain below pre-pandemic levels in most countries.
During a virtual four-day meeting, the Committee discussed the state of its work on building a database of subsidies in the steel sector. Members agreed to resume collecting subsidy data on the world’s largest steel producing jurisdictions, including those where recent data on increasing production has raised concerns about potential government support. This marks a further step towards improving transparency on support measures and will feed into future work examining the impact of these measures on global steel markets.
>> Read the full statement from Ulf Zumkley, Chair of the OECD Steel Committee.
The OECD Steel Committee has 25 members (Austria, Belgium, Canada, the Czech Republic, Finland, France, Germany, Hungary, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the UK, the US and the EU).
In addition, five associates (Brazil, Kazakhstan, Romania, Russia and Ukraine) and seven participants (Argentina, Bulgaria, Egypt, India, Malaysia, South Africa and Chinese Taipei) bring their perspectives to the Committee’s work. A number of other economies also participate in some Steel Committee meetings as invitees.
For further information, journalists are invited to contact Catherine Bremer in the OECD Media Office (+33 1 45 24 97 00).
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.