The organization for economic cooperation and development (OECD) has excess capacity and trade friction again issued a warning, saying, excess steel production capacity is harming the global iron and steel industry, the financial index of industrymay be worse than at the end of the 90’s global steel during the crisis.
OECD said in 2013, the global steel consumption was 16.48 tons, less than the nominal capacity of about 5.16 tons, the difference to the global steel industry history of the highest, and the next few years of excess production capacity will be more serious. 2013-2017, the global crude steel production capacity may increase by 1.97 tons, increased 9.1%, and the steel consumption is only moderate growth.
Usually, a parts of the world the excess capacity is likely to replace the other areas of production capacity, it is bound to harm the replaced market manufacturers, which lead to trade frictions and government intervention to protect domestic industry. Today’s trade friction continues to heat up, and have intensified, government subsidies helped, business investment in equipment and make the enterprise maintain production, that should be closed is the main cause of trade friction.
OECD says, for the government, eliminate the distorting policies such as subsidies and other vital market, only in this way, can inhibit the emergence of new capacity or speed up the loss of the closure of enterprises. OECD will hold a high-level meeting of global excess capacity problems, aims to establish a common point of view, to avoid distorting trade and competition, to produce a positive impact on long-term sustainable global steel market.