The Organization for Economic Co-operation and Development (OECD) has warned that the global steel industry is facing a prolonged crisis as excessive capacity growth outpaces weak demand, driving trade disputes and slowing decarbonization efforts. According to the Steel Outlook 2025 report, planned capacity expansions of 165 million metric tons by 2027 could push the industry's utilization rate down to 70 percent.

China and India are expected to contribute nearly 58 percent of the new capacity despite global demand growing at a mere 0.7 percent annually through 2030. This overproduction has already caused steel prices to fall to four-year lows, squeezing profit margins and prompting governments to launch 81 new antidumping investigations in 2024—five times more than in 2023.

Government subsidies, particularly in non-OECD countries, are exacerbating market distortions, allowing inefficient plants to operate while fueling unjustified investments. Meanwhile, rising trade tensions have led countries to implement sectoral tariffs, with nearly 80 percent of new antidumping cases targeting Asian producers. The crisis threatens decarbonization efforts as a significant portion of upcoming capacity will rely on carbon-intensive blast furnace technology, delaying the transition to cleaner alternatives.