【SMM Iron & Steel】OECD: Excess global steel production capacity continues to weigh on markets

Published: Jun 5, 2026 16:26

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According to the OECD's latest Steel Outlook 2026,

global excess steel production capacity is projected to reach 745 million tonnes by 2028 — surpassing total OECD steel output by 319 million tonnes.

Planned new capacity additions of 139 million tonnes between 2025 and 2028 represent a 5.7% increase, while demand is forecast to grow at only

around 0.9% annually, widening the supply-demand gap. Most new capacity is being built outside OECD countries,

frequently with government support — in 2024, Chinese steelmakers received subsidies equivalent to 15 times more relative to total

assets than producers elsewhere. OECD member capacity contracted overall, with the UK seeing the sharpest decline at 39.7% between 2021 and 2025,

followed by Japan at 7.2%. Export restrictions on scrap metal across 42 countries and rising energy costs linked to Middle East tensions are further

weighing on investment and the low-carbon transition.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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