Coping with overcapacity in steel is a global proposition

Recently, the ministerial meeting of the global forum on steel overcapacity came to an end in Berlin. The meeting reached a consensus on cutting excess capacity. Participants generally agreed that steel overcapacity is a global issue that needs to be dealt with jointly by all countries.

Representatives of 33 members from the Group of Twenty and the Organization for Economic Co-operation and Development took part in the meeting. The consensus policy recommendations formed by the conference report hold that quick and effective solutions to the global excess capacity require measures to enhance market function, adjust the structure and increase transparency of policies.

The commission’s trade minister, Cecilia Malmström, said that this is a useful start for the global response to overcapacity in steel and paves the way for a common solution to the future.

For overcapacity, Jack Welch, the former chief executive of General Electric Company, once pointed out: “Overcapacity exists in almost all industries in the world at present.” Overcapacity is the prevalence, period, and structure that emerge in the global economic development Sexual issues are not peculiar economic phenomena in the steel industry and are common difficulties and challenges that all countries in the world face.

In 2016, the Group of Twenty summit in Hangzhou reached a consensus on the root causes of global steel overcapacity. That is, the global economic recession caused by the financial crisis in 2008 led to a drop in demand for steel.

According to the World Steel Association, global crude steel output in 2016 was 1.63 billion tons, an increase of 1% over 2015. Data from the Organization for Economic Co-operation and Development show that in 2016 the global steel production capacity was about 2.37 billion tons and the excess capacity exceeded 700 million tons.

In response, Hans Jürgen Krkhoff, chairman of the German Steel Federation, appealed: “We (all countries) need to face up to problems and formulate consistent rules to deal with them.” He believes that coping with steel overcapacity will be a long-term The process requires the sustained efforts of all countries in the world.

Zaporizhz, German Minister of Economy and Energy, pointed out that to solve the problem of overcapacity requires an open market and a fair trading environment. German media also commented that any trade protectionism can only aggravate overcapacity issues and that all countries need to work together to stop trade protectionism.

In response to overcapacity, China has made outstanding contributions. Li Chenggang, assistant minister of China’s Ministry of Commerce who attended the meeting, said that in recent years the Chinese government has taken the initiative as a structural reform of the supply side of the iron and steel industry and has actively eliminated excess capacity through market-oriented and legal means with clear objectives and strong measures with remarkable results.

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Post time: Dec-11-2017
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