Global steel industry battles surplus supply, protectionism in Commodity News 23/01/2026 Metals markets are increasingly being shaped by policy as much as by fundamentals. This is the last of our 6-part series that explores how climate regulation, industrial policy, trade policy and strategic investments are influencing supply, demand and prices across steel, iron ore and critical minerals. The global steel industry is facing multiple headwinds as protectionism becomes the norm amid excess capacity and trade policy uncertainty. Steel production capacity expanded at its fastest rate since 2009 in 2025, exacerbating trade friction and depressing prices, as oversupply — compounded by reshaped trade flows — forces producers to seek new markets, prompting a proliferation of antidumping and safeguard measures globally. Steelmaking capacity is expected to rise for a seventh consecutive year, reaching 2.55 billion metric tons by the end of 2025, according to the latest Organization for Economic Cooperation and Development steel report. Planned additions in Asia and the Middle East are expected to bring an additional 109 million mt of new capacity by 2028, reinforcing the world’s structural overcapacity. The report pegged 2025 surplus capacity at 680 million mt. India grows, China battles surplus India is expected to produce an additional 11.4 million mt of crude steel in 2026, up from an estimated 154 million mt in 2025, according to the Steel Commodity Briefing Service data published by S&P Global Energy CERA in December. “Excess supply has been weighing on prices, and the market needs new demand to absorb the surplus. Supply is expected to rise further as India works toward 300 million mt of capacity by 2030, and without adequate backing from domestic demand or exports, the market risks prolonged weakness,” a Mumbai-based trader said. From a 2025 high of Rupees 52,750/metric ton ($586/mt) assessed by Platts, part of S&P Global Energy, May 6, the spot cut-to-length price of IS2062, 2.5-10 mm thick HRC stood at Rupees 42,800/mt Dec. 26, down 18.9%. The government aims to continue its steel capacity goals beyond 2030 and is eyeing 500 million mt/year by 2047, with the ambition aided by a proposed Rupees 50 billion ($570 million) initiative to promote the adoption of clean steelmaking technologies, which will leverage Europe’s Carbon Border Adjustment Mechanism. “The strength of domestic markets will all depend on the export volumes. With aggressive capacity expansion in India, mills will have to ship out the excessive quantities to hold the domestic market stable,” another Mumbai-based trader said. Meanwhile, China is contending with a steel surplus exacerbated by poor domestic demand and minimal efforts to reduce capacity. China’s steel exports appear poised to set a record in 2025, continuing a trend of exporting in a bid to prevent inventory buildup. As a result, protectionism is likely to grow as countries with domestic steel industries implement antidumping duties and seldom-used safeguards. Vietnam, which is leading the pack in Southeast Asia with steel capacity expansions, has launched an antidumping investigation into imports of wider-width hot-rolled coils from China as of late October. The probe followed Vietnam’s imposition of antidumping duties in July on China-origin HRC with a width of less than 1,880 mm. According to Yeoh Wee-Jin, secretary general of the South East Asia Iron and Steel Institute, steel overcapacity could lead to s