Steel market glut

OECD Observer
Page 7 

The steel trade is suffering from a glut on the market. Workers and communities in many steelmaking areas are being affected, as is the ability of a growing number of firms to upgrade and maintain competitive facilities. Overproduction and overcapacity worldwide mean that many companies are struggling to survive. Should governments step in?

These were the questions addressed at a high-level meeting convened by the OECD in September. Government officials and industry representatives addressed the problem of how to deal with uneconomic or inefficient excess steelmaking. Specific attention was paid to measures that could reduce steelmaking capacity, which in the absence of special conditions or supports, would not otherwise be viable.

Market distorting practices were still prevalent in the global steel market, officials agreed, and called for government assistance with the social and environmental costs to permanently close steel plants. Government officials pointed out the need to refrain from subsidies and other measures that distort competition and trade, but agreed to evaluate the long-term economic viability of their steel facilities in an open global market, and consider policies to facilitate the reduction or closure of inefficient plants. A second meeting is planned for December 2001 for governments to discuss longer-term objectives, and options to resolve the steel market glut.

For background papers on this meeting, see the OECD website, under “Enterprise, industry and services”.

©OECD Observer No 229, November 2001

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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