Global steel demand growth according to OECD is expected to remain moderate in 2013 and 2014.
According to a statement from Chairman Risaburo Nezu, in the first three quarters of 2013, global steel production reached 1,582 million metric tonnes (mmt) in annualised terms, representing an increase of 2.7% compared to the first three quarters of 2012. Chinese steel production increased by 8% year-on-year in the first three quarters of 2013, reaching a new all-time high of 783 mmt in annualised terms. In the rest of the world, steel production was 798 mmt in the first three quarters of 2013 (annualised), down 2% year-on-year.
The OECD Steel Committee further considers that excess capacity is weighing on the current and future economic health of the global steel industry. Chairman Nezu further added that excess steelmaking capacity, the economic health of the steel industry, and steel market openness are inter-linked. Concerns have been raised in the Steel Committee that trends in these three dimensions may have become worse since the global financial crisis of 2008. Excess capacity has reached very high levels, the industry’s financial situation is weak, and trade protectionist measures seem to be increasing.
Steel trade and policy developments are also an issue for OECD. According to the Committee, global excess capacity, low prices and profitability have led to a variety of trade restrictive measures including frequent recourse to safeguard measures, thereby adversely affecting the openness and dynamism of global steel markets. OECD members noted that subsidized trade and dumping practices appear to be increasing. As a consequence, countries are responding with trade remedy actions which are legitimate measures to counter-act unfair trade provided they are compatible with WTO rules. Some OECD members noted that the abuse of these measures should be avoided, according to Mr Nezu. Moreover, raw material export restrictions on steelmaking materials are becoming increasingly sophisticated, such as combinations of export restrictions with certain localisation requirements.
For discussion of further issues by OECD including policies to promote energy efficiency, see http://www.oecd.org/sti/ind/75thsessionoftheoecdsteelcommittee.htm