OECD steel meet wraps up with overcapacity warning

Dec 11, 2009 | 12:41 PM | Kevin Foster

The global steel industry might face a period of widening excess capacity during the next few years, the Organization for Economic Cooperation and Development (OECD) Steel Committee warned as it wrapped up its annual meeting in Paris.

The steel industry is gradually emerging from one of the worst downturns in decades but faces challenging years ahead as it looks to match production to demand, manage a shift to emerging economies and deal with structural changes caused by climate-change policies, the committee said.

It might take three to four years for consumption to reach pre-crisis levels in some OECD economies, and while the situation in many emerging economies is more favorable world demand might have shifted to a lower level, it said. Despite this, steelmaking capacity hasn't adjusted accordingly and global capacity might exceed demand "by a wide margin" through to 2012.....