Executive Vice-President Valdis Dombrovskis

Welcome remarks

at the Global Forum on Steel Excess Capacities

Brussels, 26 October 2020

I suggest we start our Global Forum on Steel Excess Capacity.

I have the honour to chair this 4th ministerial meeting of the Global Forum on Steel Excess Capacity, together with Deputy Minister Kyungsung Kang. The Global Forum on Steel Excess Capacity is a unique venue to address collectively the problem of steel  excess capacity and to tackle government policies and measures that contribute to it.

While it is necessary to continue to remove excess capacities that are no longer viable, it is also important to ensure that any capacity expansions are driven by market forces, are in line with true prospects for steel demand in the long term. In addition, as the Forum’s  work moves forward, the longer-term structural risks of decreasing steel demand are important to consider, and also  near-term consequences of the coronavirus pandemic.

The pandemic has led the world economy into its worst downturn in decades. Economic sectors have come to a standstill, labour markets have deteriorated sharply, supply chains have been disrupted and financial markets have come under stress.

The crisis has also lead to the steepest decline in steel demand since the global financial crisis of 2008-09 and could potentially last longer than what was experienced during the previous crisis.

The risks of growing steel excess capacity in the wake of the Covid-19 crisis have risen sharply, making the work of the Forum more important than ever to help bring transparency and stability to steel markets during these unprecedented times.

This Forum brings a unique set of tools to the challenge of addressing excess capacity in the global steel sector. We, as members of this Forum, pursue our work based on agreed principles and methods. We regularly exchange information on our respective steelmaking capacity; on the number, nature, and identity of steelmaking enterprises operating in our jurisdictions; and on government support measures provided to steelmaking enterprises. We discuss and assess these developments based on agreed principles designed to ensure market functioning in the steel sector. The process is enhanced through regular engagement with steel industry representatives who are invited to contribute to this important work, and as we see it also in today’s Ministerial.

Today, we will discuss the achievements of the Forum since the Tokyo Ministerial, based on a substantive draft report before us. The report includes an overview of the steel market situation before the Covid-19 pandemic. It presents the impacts and future prospects for the industry after the pandemic. It informs of the new rounds of information sharing among the members of recent discussions with industry representatives, including as regards Covid-19-related developments occurring in the early months of 2020.

Most importantly, the report includes recommendations and proposes next steps for our work.

Last but not least, we should discuss how to extend the participation of other OECD and G20 countries in the Forum and how to bring China, the World’s largest steel producer, as well as India and Saudi Arabia back to this dialogue.

So, I am looking forward to our discussion.

I would now invite my co-chair to take the floor for his welcoming remarks.

Thank you!