Steel is an essential material used in virtually all manufacturing sectors and construction applications, and the steel sector plays an important role in connecting economies through its central position in global value chains. With more than 90 countries producing a combined 1.87 billion metric tonnes of crude steel in 2019, few challenges have more global impact than those facing the steel sector.
Excess steelmaking capacity creates significant difficulties for steel producers in advanced, emerging and developing economies alike. It depresses prices, undermines profitability, generates damaging trade distortions, jeopardizes the very existence of companies and branches across the world, creates regional imbalances, undermines the fight against environmental challenges and dangerously destabilizes world trading relations. It especially undermines income opportunities of employees.
Recognising the serious problem of excess capacity in the global steel industry, at their September 2016 summit in Hangzhou, G20 Leaders called for the formation of a Global Forum on Steel Excess Capacity (GFSEC) to increase information sharing and cooperation. The GFSEC was formally established in December 2016 in Berlin. Global Forum members include eight of the ten largest steel producing economies in the world.