What's the issue?

Steel is an essential material used in virtually all manufacturing sectors and construction applications, and the steel sector plays an important role in connecting economies through its central position in global value chains. With more than 90 countries producing a combined 1.87 billion metric tonnes of crude steel in 2019, few challenges have more global impact than those facing the steel sector.

Excess steelmaking capacity creates significant difficulties for steel producers in advanced, emerging and developing economies alike. It depresses prices, undermines profitability, generates damaging trade distortions, jeopardizes the very existence of companies and branches across the world, creates regional imbalances, undermines the fight against environmental challenges and dangerously destabilizes world trading relations. It especially undermines income opportunities of employees.

Recognising the serious problem of excess capacity in the global steel industry, at their September 2016 summit in Hangzhou, G20 Leaders called for the formation of a Global Forum on Steel Excess Capacity (GFSEC) to increase information sharing and cooperation. The GFSEC was formally established in December 2016 in Berlin. Global Forum members include eight of the ten largest steel producing economies in the world.

About the Global Forum

The Global Forum on Steel Excess Capacity (GFSEC) is an international platform to discuss and find collective solutions to the challenge of excess capacity and enhance market functioning in the steel sector. It brings together policy makers and relevant stakeholders to share information and cooperate in line with the call of G20 Leaders at the Hangzhou Summit in September 2016. 

The Global Forum is an open platform for all G20 members and interested members of the Organisation for Economic Co-operation and Development (OECD). The GFSEC is facilitated by the OECD, which provides technical, analytical and meeting assistance to support the Global Forum, its steering group and chairmanship.

The impact of COVID-19 on the sector

As the global economy is hit by the COVID-19 pandemic, the steel industry and the whole steel value chain is suffering from the crisis in a very significant way. The underlying distortions caused by the existing overcapacity have further aggravated the situation. It is in this context that GFSEC members and industry representatives met at the virtual stakeholder event on 7 July 2020 to discuss the impacts of COVID-19 on steel markets and the expected recovery path, policy responses to the crisis, and the longer-term effects that the crisis may have on excess capacity and the overall health of the global steel industry. Further information as well as the presentations made at this stakeholder event are available here.

The GFSEC will continue to closely monitor developments in the steel sector and will include analysis on the impact of the pandemic in its report to Ministers, which will be submitted to G20 leaders.