Steel

OECD: Global crude steel capacity at 2.4 bln t/y in ’23

Steelmaking capacity worldwide had started to increase in 2019 after several years of gradual decline following the previous peak in 2014, with the growth in installed capacity continuing until 2022 before stabilizing in 2023, the report says.

 

Last year’s dip notwithstanding, worldwide crude steel capacity in 2023 still represented an increase of 54 million t/y or 2.3% compared with that in 2018, exceeding last year’s global steel production by 543 million tonnes, the report notes, with much of the growth occurring in two key ASEAN economies – Indonesia and Vietnam.

 

 

During the past five years, crude steelmaking capacity in Indonesia jumped by 7.8 million t/y or 49.1% while that in Vietnam rose by 25.6% during the same period or by 5.3 million t/y, the OECD says.

 

Regarding steel exports, neither of the two countries had ranked among the top 20 exporters globally in 2018, yet by 2022, Indonesia and Vietnam were ranked 15th and 18th respectively. The OECD predicts that the two countries may become significant steel exporters in the next few years if the growth in local demand underperforms.

 

In the Middle East, Iran had added 15.7 million t/y of crude steel capacity over the past five years, with the growth rate reaching 37.1%, while capacity in Iraq climbed by 2.2 million t/y or 83.4% during that period. With its growth rate outstripping that of other economies in the region, Iraq now has the same capacity as the United Arab Emirates, the third largest Mid-East economy, the report notes.

 

Excess steel capacity is likely to become increasingly problematic in coming years, as investments in new steelmaking capacity are expected to rise rapidly while global steel demand may remain sluggish, the Organization pointed out, adding that the sector’s profitability has slipped to the low levels recorded over 2014-2015 when the steel industry’s previous crisis began.

 

Currently, additions to crude steel capacity equivalent to about 68.3 million t/y are progressing worldwide and will be brought onstream over 2024-2026. At the same time, a further 88.7 million t/y of capacity additions are currently in the planning stage for possible commissioning during the same period.

 

Note: Estimates regarding steelmaking capacity in 2026 and expected percentage changes are based on gross additions only, and the actual capacity levels will be affected by closures that may occur during the period.

 

The projects underway are those where construction has already commenced, or where equipment contracts have been awarded and where major financial or state commitments have been made, the report notes. The status of planned projects is more uncertain as they are either at the feasibility or early planning stage, might not yet have received financial or government support, or are not scheduled for completion at a specific date, the OECD explained.

 

In sum, the total of new crude steelmaking capacity either being constructed now or in the planning stages for completion over the next three years may touch 157 million t/y, with those employing blast furnace technology accounting for 41.5%, those hosting electric-arc-furnaces 54.5%, and projects with unknown technology accounting for 4%, according to the report.

 

Written by Nancy Zheng, zhengmm@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com


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