OECD Steel Committee gravely concerned about COVID-19 impact
by David Fleschen
The OECD Steel Committee expressed grave concern at its meeting this week over the deterioration in steel market conditions related to the COVID-19 crisis. The slump in demand caused by the global pandemic comes as steel production and inventories continue to grow in China. The Committee also noted with concern that the difficult market conditions were causing significant job losses in the industry.
The latest OECD data show that global steelmaking capacity could increase to 2,455.8 million metric tonnes (mmt) in 2020. While the gap between global capacity and production narrowed from 2016 to 2019, it is likely to widen to as much as 700 mmt this year due to overall capacity increases and production decreases resulting from COVID-19. The Steel Committee noted that new steelmaking capacities due to come into operation in the Middle East and Asia this year are set to exacerbate excess capacity.
During a virtual four-day meeting, the Committee also reiterated the need for further capacity reductions in relevant economies, including by facilitating the exit of inefficient producers and by supporting workers affected by plant closures.
Source: OECD Photo: Fotolia