Steel associations call for action on excess steel capacity

Sixteen steel industry associations applaud the agreement “of the vast majority of members of the Global Forum on Excess Steel Capacity” to “continue the work related to the problem of excess in steel production capacity," according to an Alacero Latin American Steel Association news release.

“According to the latest OECD information, there are 440 million tons of excess steel capacity in the world today. This means an increase of 6.5 percent over the previous year," the associations said. “The governments of the steel producing countries around the world must redouble their efforts to cope with the persistent increase in steel production capacity, including a prompt implementation of trade rules and remedies that reduce excess capacity, its impact and its origin."

Associations in North and South America, Europe, Africa and Asia called on governments to continue work to "strengthen efforts aimed at eliminating the persistent excess capacity in steel production" through the Global Forum on Excess Steel Capacity and other negotiation forums. The associations urge governments to:

• reduce excess capacity; 
• eliminate subsidies that distort the market and any other measure that contributes to excess capacity; 
• defend effective commercial remedies to ensure a playing field based on market forces;
• support strong international rules against subsidies and preferences towards state enterprises;
• improve transparency and cooperation; and
• create strong mechanisms to facilitate the exit of inefficient companies.

Alacero welcomed the statement made by Ulf Zumkley, chairman of the Organization for Economic Co-operation and Development (OECD) Steel Committee on Sept. 30, where he expressed concerns about the unexpected growth in global steelmaking capacity in the first half of 2019. OECD Steel Committee participants reiterated the need for further reductions in production capacity in relevant countries and urged members to extend the Global Forum on Excess Capacity in Steel beyond its expiration date in 2019.

“We appreciate the efforts made to date by the member countries of the G20 and the OECD to address excess capacity and to support an even playing field within the Global Forum on Excess Capacity in Steel of the G20 and in the Steel Committee of the OECD,” the association said. “Unfortunately, the capacity reductions and concrete actions to remove government measures that distort the market, including the raw materials market, have not been adequate so far.”

Alacero also urged governments to “remain energetic by all means until reaching substantive results on the critical problem of overcapacity.”

The global steel associations that issued the call to action are: Steel Manufacturers Association, American Iron and Steel Institute, European Steel Association, Canadian Steel Producers Association, Canacero, Alacero, Brazil Steel Institute, Turkish Steel Producers Association, Republican Association of Mining and Metallurgical Enterprises, Japan Iron and Steel, European Steel Tube Association, Korean Iron and Steel Association, Specialty Steel Industry of North America, South African Iron and Steel Institute, Cold Formed Steel Bar Institute, the Association of Enterprises, Russian Steel Association, Indian Steel Association and the Committee on Pipe and Tube Imports.