At their meeting in Paris on June 8, 2023, members of the G20 Global Forum on Steel Excess Capacity (GFSEC) discussed the increasing risks of global crude steel excess capacity. It was stated that the global steel excess capacity, which lowers steel prices, depresses the profitability of the steel industry and can lead to job losses in the sector, has recently increased, and could continue to rise in the coming years.
The members stated that new capacity investments have potential to worsen the excess capacity issue and raise the risk of a global steel crisis at a time when the industry needs market stability to decarbonize. The OECD analysis shows a potential of 166.1 million mt of new steelmaking capacity coming on stream in 2023-25, more than half of which is carbon-intensive, as SteelOrbis previously reported. The gap between global crude steelmaking capacity and steel demand is expected to increase to 644 million mt by 2025, which would be the highest level of global excess capacity since the steel crisis of 2016 that led to the establishment of the GFSEC by the G20.
In 2022, global steelmaking capacity increased to 2.46 billion mt, the highest figure in history. The gap between global crude steelmaking capacity and steel demand expanded to 570 million mt in the given year from 475 million mt in 2021.