Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The European Union (EU)has called on G20 leaders to address the global excess capacity in steel production at the next “Virtual Summit” in Riyadh on 21-22 November, hosted by the EU. The European Steel Association (Eurofer) applauds the active statements by the EU and the European Commission along with 29 members of the Global Forum on Steel Excess Capacity (GFSEC) to be placed as an item on the agenda.


Axel Eggert, director-general Eurofer, said that the EU has reduced steel capacity by 22mn mt over the past 10 years, but despite the loss in economic activity worldwide due to the 2020 pandemic, global excess capacity continues to be driven by China. The results could threaten nations as their economies begin to recover from the COVID-19 pandemic. 


The economic distortions caused due to the excess steel capacity dumped into global markets have led to depressed prices, closures of domestic mills, lower industry investments, loss of jobs, and environmental costs in the EU and countries around the world. 

National and regional steel associations, including Eurofer, recently urged the GFSEC to address the steel capacity issue more assertively. The push is especially relevant as production was, in some cases, cut in half while global steel demand fell by 25-35pc in Q2 due to the pandemic.


Recommendations set out in the Berlin, Paris, and Tokyo reports within the forum aim toward increased transparency in regional markets. However, India, Saudi Arabia, and China have declined to support the forum’s objectives. Despite the lack of support from these countries, G20 leaders are being requested to consider the overcapacity issue within the G20 agenda through the GFSEC initiative. 

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