By Carolina Curiel (ScrapMonster Author)
May 18, 2016 08:00:27 AM
BRUSSELS (Scrap Monster): The joint press release on suggestions to tackle global steel overcapacity woes, issued after a high-level meeting of stakeholders held last month has been welcomed by various steel industry associations across the world. The “High Level Meeting on Excess Capacity and Structural Adjustment in the Steel Sector”, organized by the OECD Steel Committee, was held in Brussels during April 18th to 19th, 2016.
The participants of the meet included high level representatives of Canada, the European Union, Japan, Mexico, the Republic of Korea, Switzerland, Turkey, and the US and representatives from the global steel industry. The participants of the open discussion noted that steel overcapacity is an issue of global concern and that it needs global solution. The representatives agreed to continue bilateral discussions during the upcoming months and analyze the progress of such efforts during the follow-up meeting scheduled to be held during early-September this year.
The global economic developments often pose challenges to steel industry. However, the government support measures including subsidies, anti dumping and safeguard duties have led to trade tensions. This has contributed immensely to distorted trade flows and unfair trade.
According to the press release, governments are required to play positive role in restructuring process, by supporting capacity closures and assisting displaced workers. The restructuring process should result in more efficient resource allocation and should be market-driven. The participants highlighted the need to identify effective policies to address current steel excess capacities. The market-distorting policies should be removed at the earliest to ensure that overcapacity challenges do not emerge in future.
China- A huge concern
The steel associations representing eight countries- the U.S, Canada, Mexico, Latin America, Brazil, Europe, Turkey and Korea expressed disappointment on China not joining with them in addressing global steel overcapacity problem. Incidentally, China accounts for almost 50% of the global steelmaking capacity. The industry associations stated that all efforts will be made to rope in China into any future course of action.
A big step forward
The eleven associations-American Iron and Steel Institute, Steel Manufacturers Association, Canadian Steel Producers Association, Canacero, Alacero, Specialty Steel Industry of North America, Instituto Aco Brasil, Korea Iron and Steel Association, Eurofer, Turkish Steel Producers Association and The Committee on Pipe and Tube Imports termed the Brussels meeting as a big step in the right direction. It also urged Chinese administration to actively participate in future discussions.
The key steel producing countries along with trade partners must try to develop a comprehensive information sharing platform towards efficient monitoring of crude steel capacity developments. A more active role must be played by member nations in developing guidelines on key government policies and supporting the measures to facilitate industry restructuring and optimization. There must be more accurate studies to forecast long-term demand and supply, by taking demographic trends into consideration. The ties with international institutions and organizations need to be strengthened, especially in connection with efforts pertaining to excess capacity and restructuring.