Issue 14, 2024 - This week's editorial: Demand growth sluggish; costs, overcapacity hit industry: OECD

Global steel demand growth will continue to be very sluggish in 2024-25 amid deteriorating market conditions, according to the OECD Steel Committee. Steel firms need to absorb higher costs while facing weak demand and surging imports due to global excess capacity.

Demand for steel fell by 3.3% in 2022 and recovered by only half this amount in 2023 as higher interest rates worldwide continue to depress construction activity and investment. High and persistent inflation is meanwhile reducing spending on steel-intensive durable goods and has led to higher raw material costs for steel firms since June 2023, the committee noted following its 95th session in late March.

World crude steelmaking capacity in 2023 is now estimated at 2.439 billion tonnes, exceeding production by 552 million tonnes. Around 23mt of potential new capacity growth in ASEAN during 2024-26 is through cross-border investments or joint venture investments.

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