A recent report released by the Organization for Economic Co-operation and Development (OECD) warned that overcapacity outside China is affecting the recovery of the global steel industry. International observers believe that overcapacity in steel and other industries is a global issue. In the past two years, China reduced its production capacity and helped the world's steel and other industries recover from the downturn caused by overcapacity. In the future, all countries should continue to strengthen communication and cooperation so that they can collectively cope with the challenge of overcapacity .
According to a report released by the OECD Steel Council, the global steelmaking capacity in the first half of 2017 was 2.36 billion tons, down slightly by 0.6% from 2.37 billion tons in the same period of 2016. Among them, the Middle East, South America, with the exception of the European Union and other European countries, steel production increased significantly. The steel council chairman Lisen Toptone said: "Excess capacity is alarmingly high."
The report predicts that from 2017 to 2019, the global steel production capacity will be nearly 40 million tons, of which the Middle East will add about 23 million tons.
Alistair Ramsay, head of metals market research firm in the United States, said any increase in steel production in any region could pose a clear risk to future steel pricing and profits.
According to the OECD's report, global steel demand will pick up in the future but not enough to absorb the current excess capacity. Chris Holden, a researcher at the Commodity Institute in the UK, also predicted that global demand growth will not be sufficient to provide a sound basis for new capacity.
Li Bo, a visiting fellow at the Center for International Chinese Studies at Aichi University in Japan, said the global overcapacity problem is still very serious, mainly in the traditional industries such as steel, non-ferrous metals and rubber, raw materials processing, overcapacity in emerging markets and developing countries More concentrated.
Overcapacity is a cyclical phenomenon in a market economy and is a structural issue. Since the outbreak of the international financial crisis, the downturn in demand led to the global economic downturn, which is the root cause of the current global overcapacity in steel and other industries.
Overseas experts also pointed out that after the international financial crisis, many countries took large-scale economic stimulus measures to give priority to the development of iron and steel, petrochemical and other industries but with limited investment in science and technology, leading to overcapacity in the middle and low-end industries, high-end capacity shortage and structural overcapacity.
Some western politicians and enterprises are keen on blaming China for overcapacity. This view is neither objective nor fair. In fact, in recent years, China has taken the initiative as the main line of supply-side structural reform and has contributed to the international community by digesting and eliminating excess capacity such as steel and coal.
China's efforts to reduce production capacity are unique in the world. Official figures show that China exited more than 65 million tons of steel capacity last year and reduced its output by 50 million tons again this year. China Iron and Steel Association said that China has basically achieved its goal of cutting over 100 million to 150 million tons of excess capacity over the five years set in last year.
Edwin Basson, director general of the World Steel Association, said China has played a prominent role in reducing excess capacity globally. In the past two years, China has cut its production capacity to a level comparable to that of the United States.
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At present, the world economy is getting better and the global trade and investment are getting warmer, and the confidence of all parties has been significantly enhanced. There are reasons to believe that with the continuous promotion of international capacity cooperation, all parties will pay more attention to policy coordination and the production capacity in various countries and regions will be more balanced. The supply and demand of global industries will be more reasonable.
