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Steel trade groups urge governments to address excess capacity crisis

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Steel industry organizations around the world are urging the governments of steel-producing economies to intensify their work in the Global Forum on Steel Excess Capacity (GFSEC).

Steel industries in the Americas, Europe, Asia, and Africa are expressing “tremendous concern” about the recent increase in steel overcapacity at time when steel demand has been “severely depressed” by the COVID-19 pandemic, “reversing a trend of gradual decreases in overcapacity in the three years since GFSEC was established,” 2016-19, according to a joint statement released this week by a number of steel trade groups, including the American Iron and Steel Institute.

"The associations noted the uneven state of recovery in macroeconomic conditions and steel production across the world and are particularly concerned about a risk of potential destabilization of international steek markets,” the statement said.

“Steel industries commend the commitments taken by the members of the steel forum to create transparency in regional market and capacity evolutions and review capacity increases based on the agreed policy principles and recommendations set out in the Berlin Ministerial report,” the statement said. “However, the scale and persistence of excess capacity in the steel industry calls for more ambition in the transparency and policy-related work of GFSEC.”

The steel associations specifically urge participating governments of the forum to do the following:

-- Develop stronger disciplines on industrial subsidies and other support measures that contribute to excess capacity and distort markets.

-- Uphold effective trade remedies to ensure a level playing field driven by market forces and fair trade.

-- Deepen the analysis of the drivers of steel capacity expansions to expose subsidized or non-market driven investments.

-- Make a reliable forecast for steel demand in the markets where investments are to be made.

-- Add value to the transparency work by developing open communication and information to the public.

-- Communicate to G20 leaders the need for expanded efforts to address the growing steel excess capacity crisis.

“The steel associations also call on non-participating governments to resume active participation in GFSEC’s work,” the statement concluded. “Effectively addressing the global steel crisis is in the interests of all economies, steel producers, and steel consumers worldwide, and requires the active engagement of all G20 economies.”

 

 

Posted 10/22/2020

 
 
 
 

 

 

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