Global steel crisis deepens as oversupply reaches alarming levels, OECD warns in Commodity News 06/06/2026 The global steel industry is facing a growing crisis as subsidised production and excess capacity continue to distort markets, according to the OECD. It says state-backed steel production, particularly in China, is increasing pressure on producers in Europe and other OECD economies. Global steelmaking capacity continues to expand despite weak demand, threatening to push prices lower and distort competition. Steel is a critical material for a wide range of industries, from construction and manufacturing to electric vehicles and data centres. The OECD says government subsidies are a major driver of global overcapacity, with much of the increase in steelmaking capacity over the past two decades taking place outside OECD countries, often with state support. In 2024, the median Chinese steel firm received subsidies equivalent to 15 times those received by producers elsewhere, relative to total assets, according to the OECD. At the same time, Chinese steelmakers exported a record 131 million tonnes of steel in 2025, a 153% increase from 2020 and more than the European Union’s total steel production that year. The warning comes as the OECD expects global steel overcapacity to rise from 640 million tonnes in 2025 to 745 million tonnes by 2028, as steelmaking capacity continues to grow far faster than demand. While global steel demand is expected to increase by just 34 million tonnes between 2026 and 2028, producers are planning to add up to 139 million tonnes of new capacity over the same period. China is expected to play a major role in that expansion, with plans to add up to 38.6 million tonnes of steelmaking capacity by 2028 – the largest increase planned by any country. If those projects go ahead, the OECD says global excess capacity would exceed the current annual steel production of all OECD countries by almost 320 million tonnes, underlining the scale of the imb