Released on May 27, 2025, the OECD Steel Outlook 2025 provides a comprehensive analysis of the global steel market’s current state and medium-term prospects, highlighting pressing challenges that will shape the industry in the coming years. The report warns that planned capacity expansions worldwide—projected to reach 6.7% (165 million metric tonnes) between 2025 and 2027—risk deepening global excess capacity amid sluggish demand growth. Asian economies, led by China and India, are expected to account for 58% of the new capacity, with cross-border investments involving Chinese entities making up 16% of the total planned tonnage.

       With global steel demand forecast to grow by a mere 0.7% annually through 2030, capacity utilization could fall to around 70%, exerting significant downward pressure on prices and profitability. Steel prices and industry profitability have already declined sharply from their 2021 peaks to historic lows, though the report notes early signs of a potential bottoming out. Regional demand trends are highly divergent: while ASEAN and MENA regions show robust growth, demand is contracting in China and remaining stagnant in OECD economies.

       The report also emphasizes that trade distortions, particularly from subsidies in China, ASEAN, and MENA, are exacerbating market imbalances. China’s steel industry subsidies, as a share of firm revenues, are estimated to be 10 times higher than those in OECD countries, encouraging overcapacity and unviable investments. This has coincided with a surge in Chinese steel exports, triggering a rise in trade remedy actions and concerns about circumvention practices. Additionally, excess capacity is undermining progress on decarbonization, as uneven access to renewable energy and high-grade ores slows the adoption of low-carbon technologies across the industry— a trend that could reshape global production and trade patterns over time.