Global steel-making capacities are expected to increase by nearly 52 million mt over 2018-2020, the Organisation for Economic Co-operation and Development said in its Recent Developments in Steelmaking Capacity report.
The report, released Sunday, comes ahead of the OECD's Global Forum on Steel Excess Capacity scheduled for September 17-18 and forms part of the OECD's continuing drive to reduce overcapacity, which reached as much as 561 million mt in 2017.
Currently, 39 million mt of additional capacity is in planning phase, with the potential to come online prior to 2020.
The Middle East is expected to see the major increases over this period, with 31.50 million mt of capacity currently planned for completion by 2020. The region underwent rapid expansion from 2007 to the present, with the total capacity expanding from 24 million mt to 63.70 million mt in 2017.
Iran is the major driver of steelmaking capacity expansions in the Middle East. The country expects to realise a total capacity of 52.80 million mt by 2020, up from just 28.20 million mt in 2016.
Asia also has 19 million mt of capacity expansions underway, with more planned, which could bring the total to almost 24 million mt for the period 2018-2020. With the capacity expansions expected in India, there is a suggestion that it could be the world's second largest steel producer in the next few years.
Africa currently has 5.90 million mt of expansions underway, with the bulk of these investments focused in North African countries. These include Algeria-based Tosyali's new 2.3 million mt EAF plant, which is expected to come online in 2018.
The Commonwealth of Independent States, Latin America and the North American Free Trade Agreement region, all have capacity increases underway of 2.1 million mt, 1.6 million mt and 0.6 million mt, respectively.
Global steelmaking capacity currently sits in a state of excess capacity, with a capacity-production gap of 561 million mt, and the industry has seen efforts by some countries including China to reduce their un-utilised capacity.
Source: Platts