G20 Pledges to Tackle Global Steel Glut

Published: 5 September, 2016 18:51

G20 leaders have pledged to work together to address excess steel capacity that has punished the global industry with low metal prices for years while raising tensions between China and other major producers.

A statement from the White House said that leaders at the G20 summit in Hangzhou, eastern China, on Monday (September 5) accepted that overcapacity in steel and other industries is a global issue that requires a collective response.

Proposals for the formation of a global forum that would seek a global solution and report back to the G20 next year underscore the growing resolve to support a sector that has long been grappling with chronic oversupply and sluggish demand.

Global steel production fell last year for the first time since 2009, dipping 2.8 percent to 1.6 billion tonnes, with China accounting for half of the total.

But there is a long way to go if the industry is to make a serious dent in the 700 million tonnes of excess capacity.

First concrete action

Such a forum would be the first concrete action by world leaders to try to stem output, revive producers and end a trade brawl between China and other major steel producers, including the United States.

Speaking at the summit, British Prime Minister Theresa May said the G20 had decided to do more to tackle excess output, while Japanese Prime Minister Shinzo Abe urged leaders to address the issue.

Pressed China

European and U.S. leaders have pressed China to accelerate capacity cuts, blaming its big exports on slumping prices and accusing it of dumping cheap metal in foreign markets.

They have threatened sanctions or anti-dumping taxes on Chinese steel imports and criticized Beijing for providing subsidies, such as interest-free loans, to prop up state-owned companies.

China has promised to cut steel capacity by 45 million tonnes this year, though it said last month that it was behind on that target.

» Register with Easy Forex and trade in commodities straight from your computer or mobile phone.

Related news topics

Leave a Reply