MOSCOW Global crude steel overcapacity is expected to drop to 20 percent by 2018 from 26 percent currently, according to Andrey Laptev, head of strategy development at Russian steelmaker OAO Severstal.
"Overcapacity is expected to persist (for) the next two to three years due to slow demand growth and new capacity additions," Laptev told delegates at the Moscow Steel Summit June 4. "However, (the) supply-demand balance is expected to improve (in the) longer term."
Overcapacity is expected to remain at 26 percent until 2015, when it will gradually drop over the next three years, he said, citing the forecasts of both Moscow-based Severstal and the Organization for Economic Cooperation and Development.
The current excess capacity in crude steel output is estimated at 500 million tonnes per year out of global total of 1.8 billion tonnes annually.
A version of this article was first published by AMM sister publication Steel First.