Gap between steel capacity and output could widen: OECD

World steel capacity utilisation increased to 81pc last year from 77.2pc in 2017, the OECD said today.

A 4.6pc rise in output over the same period meant that the gap between nameplate capacity and production slipped to 425.1mn t, the organisation said.

But in-progress and planned investments could result in capacity increasing by 4-5pc, or 88mn-110mn t, in 2019-21, unless there are further closures.

And given that steel consumption growth slowed last year, while trade wars and a subsequently softer global economy pose more downside risk, this suggests that structural imbalances could persist.

Global steel exports dropped in January-October 2018, according to the OECD, as trade wars dampened appetite and led to increasing barriers. Chinese exports fell by 9.3pc and Indian overseas shipments declined by 29.3pc.

Industrial production has been dropping since January 2018, led by advanced economies, the OECD said. Year-on-year industrial production growth dropped to just 0.6pc in November 2018 from 4.2pc in November 2017. The deceleration was milder in emerging economies, where growth slipped to 2.8pc from 3.2pc over the same period.

"The industrial production gap between emerging economies and advanced countries, which had narrowed during previous years, appears to be widening again," the OECD said.