Key Takeaways
• Global excess steel production capacity is projected to reach 745 million metric tons by 2026, exceeding total current steel output across all Organisation for Economic Co-operation & Development member nations by 319 million metric tons, driven primarily by government-subsidised capacity expansion in non-member economies where Chinese producers receive subsidies 15 times higher relative to total assets than producers in other countries.
• Capacity in Organisation member countries contracted by 2.8 million metric tons between 2021 & 2025, a decline that conceals dramatic national-level reductions including a 39.7% capacity cut in the United Kingdom & a 7.2% reduction in Japan, reflecting the commercial pressures imposed on market-economy producers by globally depressed steel prices.
• Rising energy costs linked to Middle East conflict, scrap export restrictions in 42 countries, & the financial pressure of overcapacity-driven price depression have combined to force the postponement of several low-carbon steel production projects, directly threatening the timeline for decarbonizing one of the world's most emissions-intensive industrial sectors.