The European Steel Association (EUROFER) has called for the Global Forum on Steel Excess Capacity's mandate to be extended, ahead of its expiry in November.
The GFSEC, which meets 28-29 March, has begun an important transparency and policy process, but its work is not yet complete, says EUROFER.
“We call on members of the Global Forum to agree on a continuation of the forum’s mandate beyond November 2019”, said Axel Eggert, director general of EUROFER. “Continued international work on excess capacity and related government support measures would contribute to the sustainability of our global industry.”
The GFSEC was established in late 2016, on the instruction of G20 Leaders. The Forum set out to gather information and report on the evolution of steel supply and demand conditions, steel production capacity, and government policies that lead to global overcapacity, such as subsidies.
“GFSEC’s work has already produced results, such as detailed statistics on steel capacity and production around the world and has instigated work to cut excess capacity where it is needed most”, added Mr Eggert.
However, while progress has been made – notably an agreement in December 2017 on principles and recommendations whereby countries and regions dismantle market-distorting subsidies and other government support measures and share data and information on the process of capacity reduction – this is still the beginning of the process.
“Global steel overcapacity is still at least 550Mt, according to the OECD”, emphasised Mr Eggert. “We are still very much at the beginning of the process, and there is clearly a need for the GFSEC’s mandate to be extended”.
Since the Forum’s first meeting two-and-a-half years ago, momentum has been steadily building; there is currently a clear level of commitment and resolve among the world’s major steel-producing countries to effectively tackle excess steel capacity, including its root causes. This momentum should not be lost, EUROFER believes.
“In a world where global overcapacity is still very much present – and with proliferating trade distortions – there is a greater need than ever for the GFSEC”, concluded Mr Eggert. “Not renewing the mandate of the Global Forum would mean abandoning the global steel industry when it is still at a perilous juncture. Effective multilateral co-operation is needed in order to preserve fair and free trade in this essential sector”.