Overcapacity remains the biggest threat to the global steel industry

The experts concluded that the global steel market remains under the threat of overcapacity, of which about 300 tonnes of steelmaking capacity must be shut down over the next decade in order for the industry to achieve sustainable profits. This will increase the capacity utilization in the industry by 80 to 85 percent.

Capacity utilization in industry averaged 78.1 percent in 2013 and 76.2 percent in the previous year. Although some capacity will be removed over the next decade, new ones are being added, which shows an increase in investment.

World steel production grew by 3.5 percent in 2013 to 1.61 million tonnes. The most notable growth was in China, where at least 58 new kilns were introduced, adding 80 million tonnes of annual capacity. Steel production in Japan also rose 3.1 percent to 111 tons. True, there was a decrease in production in South Korea, the United States, Brazil and Europe.

In 2014, global steel output is projected to rise to 1.64 million tonnes, of which China will account for 802 million tonnes. Consumption this year is projected at 1.63 million tonnes, leaving a surplus of 7 million tonnes compared with a surplus of 21 million tonnes last year.

Global steel demand increased by approximately 3.2 percent in 2013, driven mainly by growth in infrastructure and construction activities, especially in Asia. In 2014, global demand is expected to increase by 3.3 percent. Steel demand from Europe and the US is likely to improve in 2014. China was the clear leader in growth in 2013, with demand growing 6 percent last year. However, in the rest of the world, steel demand fell short of expectations.

Demand in the EU continues to decline (-3.8%). The outlook for China's demand growth in 2014 is moderate. Nevertheless, the country remains the determining factor for the global steel market in the medium and long term. And only China is able to continue to stimulate demand for steel. The range of demand has shifted towards more sophisticated consumer goods such as cars and home appliances.