Newly released “Steel Outlook 2025” report unveils analyses, projections, and challenges affecting the global steel market, highlighting accusations by the Organisation for Economic Co-operation and Development (OECD) against China, and to a lesser degree, India, for destabilizing the world steel market with massive subsidies. These practices also impact other related industries.
The report urges enhanced international cooperation between governments and industry sectors.
The OECD’s calculations indicate that China’s subsidies to the steel industry, through low-interest loans, energy price supports, direct aids, and preferential tax treatments, are tenfold compared to OECD countries, surpassing 2% of the firms’ revenues over the past 15 years.
The study documents China’s ascent from producing 26 million tonnes of steel in 1976—once representing 6% of global output—to over 1,000 million tonnes of current capacity amid an overall 2,000 million tonnes worldwide.
Meanwhile, the OECD’s foundries have seen their share cut in half over 20 years, projected to be about 22% by 2024.
The negative repercussions extend beyond the developed world’s steel industry, posing threats to steel-intensive sectors, such as automotive and machine-tool industries, unable to compete with the low pricing from China’s practices, rendering competition severely distorted.
Since 2020, Chinese steel exports have more than doubled to a record 118 million tonnes in 2024, while imports have plummeted nearly 80% to 8.7 million.
In the same timeframe, steel imports into regions like the European Union and the UK increased by 13%, 18% in Japan and South Korea, 40% in North America, 52% in Turkey, 60% in South America, and 77% in Oceania.
The OECD projects a continued upward trend in production capacities by 6.7% between 2025 and 2027, adding 165 million tonnes, with 58% centered in Asia, primarily China.
This potential supply surge will exceed demand growth, projected at around 0.7% annually until 2030, driven by several Southeast Asian nations, excluding China where contraction is expected, as well as the Middle East and North Africa.
As a result, excess capacities are anticipated to rise by 20% by 2027, totaling 721 million tonnes, nearly 300 million tonnes above the current production levels in all OECD countries.
The study’s authors argue widespread subsidies distort competition, encourage these surpluses, and hinder decarbonization efforts in a sector responsible for approximately 8% of global carbon dioxide (CO2) emissions.
Thus, they advocate for reinforced international cooperation under the platform formed in 2016 by the OECD to address these trends and market distortions, enhance companies’ economic viability, and aid steel’s decarbonization.
