OECD Steel Outlook 2026

Executive summary

More capacity, weak demand and near-record excess capacity continue to threaten the steel industry

Global steelmaking capacity continues to expand despite dim prospects for steel demand. Excess capacity is projected to increase to 745 million tonnes (Mt) by 2028 – 319 Mt more than OECD Member countries currently produce – approaching the historical highs of the last steel crisis a decade ago. Planned additions of up to 138.8 Mt of capacity through 2028 represent a 5.7% increase from 2025 levels. Global demand growth is projected to remain sluggish at around 0.9% per year through 2030, with the conflict in the Middle East, rising energy prices and disruptions in supply chains adding further headwinds. As the gap between steel production and capacity widens, utilisation rates will remain low and may slide from 76% in 2025 to 74% or less in 2028, intensifying financial pressure across the steel industry.

Countries with excess capacity are flooding world markets with steel

Most capacity expansion over the past two decades has occurred outside the OECD area, often underpinned by government subsidies and other interventions. In 2024, the median Chinese steel firms received 15 times more in subsidies, relative to their asset size, than the median producer elsewhere. When output from new facilities cannot be absorbed in national markets, the steel is typically exported to foreign markets at low prices, or in the form of steel-intensive downstream products, at the expense of producers elsewhere.

The situation in the People’s Republic of China (hereafter “China”) is particularly significant. Although China has not significantly expanded its steelmaking capacity in recent years, weak domestic demand has driven a significant export push. Chinese steelmakers shipped a record 131 Mt of steel to foreign markets in 2025, equivalent to around 14% of their annual crude steel production that year, and a 153% surge from 2020. China is now on an expansionary path again, with up to 38.6 Mt of new capacity planned through 2028 (which, for comparison, is several million tonnes more than the current capacity of Italy, the European Union's second-largest steel producer). This is expected to be the largest national expansion planned anywhere. It remains unclear if closures will match new capacity.

Capacity expansions are also happening in other regions. For example, India added 41.4 Mt of capacity during 2021-2025 and is set to add up to 31.8 Mt more by 2028, though continued strong domestic demand has kept it a modest net importer. Southeast Asia has also seen significant capacity growth, a trend set to continue through 2028. Meanwhile, the planned expansions in the Middle East are likely to be revised downward.

OECD area capacity edged down by 2.8 Mt (-0.4%) during 2021-2025, with particularly sharp declines in the United Kingdom (-39.7%) and Japan (-7.2%). With OECD Member country governments adopting stronger policy responses to address import surges, the industry will be better positioned to reverse this decline.

Governments are intensifying trade measures in response to the worsening crisis

Trade measures intensified in 2025. Antidumping (AD) and countervailing duty (CVD) actions, targeted at specific products and countries, remained at high levels, while broader measures covering wide ranges of steel products and trading partners gained ground. Brazil, Canada, India, Mexico and the United States have all raised tariffs on many basic steel products. With safeguard actions set to expire, the European Union and the United Kingdom have announced sweeping measures to support their steel industries and better address the negative impacts of structural world steelmaking excess capacity.

Trade diversion and suspicious patterns of trade, including circumvention, are undermining the effectiveness of trade actions

Close to 400 active AD/CVD measures initiated since 2016 were in place in 2025, and 75 new investigations were launched in 2025 alone, down slightly from 2024 but remaining at the high levels seen during the last steel crisis. However, ongoing OECD analysis suggests that trade measures are being actively circumvented. Following AD/CVD actions by OECD Member countries against Chinese steel in 2023 and 2024, imports from China fell as expected. However, in 88 cases, Chinese exports of the same products to Association of Southeast Asian Nations (ASEAN) countries rose, and in 51 cases, exports of the same products from ASEAN countries to OECD markets increased. A concurrent 300% surge in China’s semi-finished steel exports to Southeast Asia suggests the mechanism by which raw products are shipped to third countries, processed and then re-exported to circumvent the original measure. Exporters also exploit the breadth of steel products, which includes 3 500 grades, by making minor modifications to place their exports outside the scope of targeted orders, which is one of the reasons governments are shifting towards more sweeping trade measures that are harder to circumvent.

Steelmaking inputs face growing trade restrictions. Trade restrictions on chromium and nickel ores are becoming more common, and although steel remains the dominant end-use for these minerals for the time being, battery, energy transition and defence demand create the potential for competing use tensions in the future. Scrap, a key input in electric furnace steelmaking, is increasingly recognised as a strategic raw material, and exports are now restricted by 42 countries. Similar restrictions have been introduced in chromium and nickel markets.

New policy initiatives can drive an industry turnaround

The OECD is fostering the international co-operation needed to address the root causes of the crisis. Members of the Global Forum on Steel Excess Capacity (GFSEC) are developing a new comprehensive framework for joint action in 2026 to address the root causes and the negative effects of global steel excess capacity. In parallel, the OECD Steel Committee is strengthening its monitoring and analytical work, building tools to strengthen import monitoring and detection of suspicious trade patterns that would indicate circumvention of trade measures. Progress across all these fronts will be essential to delivering a durable turnaround of the steel industry.