Luciano Giua: Sluggish demand, high energy costs and a surge in imports threaten the European steel market

At the 20th SteelOrbis conference "New Horizons in Steel Markets", held on Tuesday, December 9, at the Marriott Asia Hotel in Istanbul, Luciano Giua, economist and policy analyst at the Organization for Economic Cooperation and Development (OECD), presented an overview of the situation on the European steel market in 2025.

Global steel capacity surplus

The first point that Mr. Jua touched upon in his speech was the global excess of steel production capacity. In Europe, capacity is expanding rapidly, but demand is not following suit. This will lead to capacity exceeding 700 million tons by 2027, especially in countries that are already experiencing overcapacity.

Another factor that drives excess capacity is subsidies such as grants, below-market financing, tax breaks, and subsidized energy, which keep unprofitable firms in the market. "The level of subsidies in China is about ten times higher than in the OECD countries," he said.

To address this critical issue, the Global Excess Steel Capacity Forum (GFSEC), a multilateral platform established by the G20 in 2016 that brings together 28 major steel producing countries, has identified three key areas where coordinated action is needed.:

• Monitoring: deepening work on non-market policy and practice to understand the economy beyond the GFSEC.
• Improving the effectiveness of trading activities: sharing experiences on issues such as melting and spilling, bypass detection, data exchange, and