Steel is Topic at OECD Meeting

Taking measures to bring world steelmaking capacity in line with demand will again be a topic at a global economic forum, according to a report in the Financial Times

The Organization for Economic Cooperation and Development (OECD) will be convening later this week in Paris. At the meeting, which starts on Wednesday,  European Union (EU) delegates are expected to lobby for their plan to create a fund to encourage plant closures.

At its meetings in February and April of 2002, the OECD Steel Committee reviewed statistics of likely pending steel mill closures provided by member nations, and agreed to “develop options for the strengthening of disciplines on government interventions and other market distortions in steel, feeding the results, as appropriate, into wider-ranging discussions at the World Trade Organization.”

The efforts to reduce global steelmaking capacity come at the same time as the U.S. Section 201 protection measures have strengthened some previously troubled operators in North and South America.

The Financial Times report notes that Cleveland-based International Steel Group (ISG) could bring new financial strength to plants owned by Bethlehem Steel, while Section 201 measures have also bolstered the fortunes of other Western Hemisphere steelmakers.

The Section 201 tariffs, which have been in place for 10 months, have not halted shipments of foreign steel into the U.S. According to the newspaper, shipments through October are running almost 8 percent above last year’s levels.

Reportedly, U.S. officials will try to persuade Europe, Japan and big developing-country producers to commit to global negotiations aimed at halting steel industry subsidies, which they cite as the reason the Section 201 tariffs were enacted in the first place.

Figures for 2002 show that steel from developing countries and from Canada and Mexico, which were exempted from Section 201, has been pouring in. Mexican imported steel tonnage is up 41 percent while Brazil’s figure is up 40 percent.