June 16, 2026
OECD reports steel excess capacity continues to weigh on global markets
According to a new report from the Organisation for Economic Co-operation and Development (OECD) global steel excess capacity continues to grow, driven by increasing subsidies in some major non-OECD steel-producing economies, while efforts to restore fair competition are increasingly undermined by circumvention of trade measures aimed at levelling the playing field.
The OECD Steel Outlook 2026 projects global steel excess capacity to reach 745 million tonnes by 2028, exceeding the OECD's current steel production by 319 million tonnes. Planned capacity additions of up to 139 million tonnes through 2028 represent a 5.7% increase from 2025 levels, while demand growth is expected to remain subdued at around 0.9% per year.
Most new capacity is being added outside the OECD, often with government support. In 2024, the median Chinese steel firm received 15 times more in subsidies, relative to their total assets, than producers elsewhere, up from 10 times in 2023. Chinese steelmakers exported a record 131 million tonnes in 2025, a 153% increase from 2020 and more than the European Union's total steel production in 2025.
The report further highlights a 300% increase in China's exports of semi-finished steel to Southeast Asia in 2025. This suggests that such products may be processed in third countries before being re-exported to OECD markets, potentially bypassing current trade measures.
Source: OECD