New Report Outlines How China Is Driving Global Steel Overcapacity

A new report from the American Iron and Steel Institute (AISI) highlights just how drastic the growth in China’s steel industry has been over the last two decades and also outlines how China has achieved this growth by subsidizing its 30 largest steel manufacturers. The AISI report notes the country has produced more than “822 million tons in 2014, which accounted for half of the world’s steel production.” It also argues that this remarkable growth “has been both supported and fueled by government subsidies and preferential policies, and this has led to enormous overcapacity in the industry while also creating a highly fragmented domestic sector made up of many weak, inefficient, and heavily polluting companies.” 

The report unfortunately concludes that “steel capacity is expected to continue expanding in the short term as new production under construction comes online.” 

As a reminder, the Metals Service Center Institute is working with the Manufacturers for Trade Enforcement Coalition to address and stop Chinese overcapacity. Last month, MSCI and other MTE members were on Capitol Hill to tell the members of the U.S. House steel and aluminum caucuses that they could help the situation by making it clear to the U.S. Department of Commerce that the executive branch should forcefully oppose China’s efforts to gain market economy status from the World Trade Organization. 

In comments to the U.S. Trade Representative (USTR) in May, MSCI also addressed policy recommendations for dealing with the global steel industry situation. Click here to read those comments and to read earlier comments submitted to the USTR by Richard A. Robinson, president of Norfolk Iron and Metal and chairman of the Metals Service Center Institute (MSCI), on behalf of MSCI.