The Global Forum on Steel Excess Capacity ministerial-level meeting will open tomorrow. The engagement is expected to deliver a report setting out the excess capacity situation in the global steel industry and define guidelines and concrete policy solutions as a basis for swift action to address the problem.
“The European steel industry welcomed the Global Forum when it was first proposed in 2016”, said Axel Eggert, director general of the European Steel Association (EUROFER). “G20 leaders recognised excess capacity as a global problem requiring urgent collective attention. Establishing verifiable principles and guidelines would kick-start the much needed response”.
The Global Forum on Excess Steel Capacity was established as the result of calls at the September 2016 G20, in China. Bringing together over 30 economies – the entire G20 and certain members of the OECD – the forum is the first global platform of its kind. It serves to develop a comprehensive policy inventory and was expressly created to address steel issues.
“Global overcapacity in steel production – estimated by the OECD to have been north of 700 million tonnes in 2016 – is a symptom of a disease. There is a pestilent mix of market distortions caused by policies in a number of steel-producing regions that impair market function,” said Mr Eggert. “These include direct and indirect subsidies, government support measures and distortive financial arrangements”.
EUROFER calls for commitment from all members of the Global Forum to refrain from market-distorting subsidisation and other government support measures related to steel capacity and production. Member governments need to foster a genuine, global level playing field, and facilitate adjustment in each steel-producing region, thereby reducing overall excess capacity.
“Global excess capacity benefits nobody – but it is safe to say that the European steel industry has been particularly affected by the effects. The EU’s open single market attracts the dumped steel from production abroad that does not find customers in domestic exporting markets”, emphasised Mr Eggert. “This is happening even as Europe has reduced its structural overcapacity”.
“This situation cannot continue. It is not sustainable. The Global Forum must reach a concrete arrangement that will tackle the plague of global overcapacity”, concluded Mr Eggert.