World annual steel excess capacity doubles since 2000

The global annual steel excess capacity, the amount of steel companies could produce minus the actual turnout in a year, kept worsening, dampening the whole industry's profits, revealed a US steel industry-backed report issued on Tuesday.

The global steel excess capacity has reached 517 million tons in 2013, twice as much as the 229 million tons in 2000, said a report issued by Economic Policy Institute and law firm Stewart & Stewart.

The report said the excess capacity reached a peak in 2009 at 579 million tons, as the world financial crisis reduced global steel consumption, but quite a lot of steel capacity was added due to governments' stimulus programs.

The excess capacity has fallen since 2009 but still kept at a historical high level, while persistently huge steel excess capacity has dampened the profitability of the whole industry.

"High level of excess capacity clouds prospects for the industry's profitability," said Risaburo Nezu, chairman of the steel committee of Economic Cooperation and Development (OECD) in December.

"As global steel demand is expected to grow slowly in the coming years and with many new investment projects coming on stream, excess capacity will continue to weigh on the operating profitability of the global steel industry," Nezu was quoted by the report.

The report also said the big excess capacity leads to surges of US steel imports in recent years due to falling import prices. The market share of imports of finished and semi-finished steel products in the United States has increased from 19.9 percent in 2003 to 29.9 percent in 2013, according to the report.

The tough competitions between US steel companies and foreign steel imports have caused huge losses of US steel industry over the past two years, with a net loss of 1.2 billion dollars in 2013 alone, said the report.