OECD Warns Steel Industry Faces Rising Pressure

(MENAFN) The global steel industry is under increasing strain due to weak demand, rising production costs, and expanding excess capacity, while government subsidies in major producing countries continue to distort market competition, according to a report released Thursday by the OECD.

The Paris-based organization said in its OECD Steel Outlook 2026 that global excess steel capacity is expected to rise sharply in the coming years, reaching about 745 million tons by 2028. This would exceed current OECD steel production levels by roughly 319 million tons.

The report also projects that planned capacity expansions of up to 139 million tons by 2028 will represent a 5.7% increase compared with 2025 levels. At the same time, global steel demand is expected to grow only modestly, at around 0.9% annually.

According to the OECD, excess capacity already reached 640 million tons in 2025, equivalent to more than one-third of global steel demand, which stood at about 1.8 billion tons last year.

OECD Secretary-General Mathias Cormann warned that the imbalance poses serious risks to both producers and broader economic stability.

“Excess capacity distorts global markets, undermines economic security and resilience, and stands in the way of innovation and sustainability,” Cormann said.

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