<article><p class="lead">Forecast lower global economic growth in 2019-2020, trade policy tensions and falling investment have dimmed the steel market outlook, the OECD's steel committee said last week.</p><p>Declining steel prices and higher raw material costs have squeezed margins, as crude steel production continued to rise in the first half of 2019. </p><p>Steel capacity is poised to rise again this year, exacerbating oversupply, with the gap between capacity and production widening to 440mn t/yr in January-June. The OECD expects global capacity to increase by 2-3pc in 2020-22.</p><p>Meanwhile, global steel trade is falling, contracting by 2.6mn t on the year in the first quarter, following a 5.2pc drop for the whole of 2018.</p><p>The OECD highlighted its concern over cross-border investment by state-run enterprises, citing implications for capacity expansions. And the committee called for the removal of subsidies, noting that these prevent inefficient mills from exiting the market. </p></article>
