Global steel excess capacity is projected to surge to 745 million metric tons by 2028, worsening an overcapacity crisis that threatens the viability of market-oriented producers worldwide, according to the OECD Steel Outlook 2026, released June 4.

The forecast comes as global steelmaking capacity reached a record 2.445 billion mt in 2025—its fifth consecutive year of expansion—even as steel demand contracted for the fourth straight year.

Excess capacity climbed to 640 million mt in 2025, already exceeding total OECD steel production by more than 200 million mt.

The widening gap between capacity and demand will push utilization rates down to 74% or lower by 2028, from 76% in 2025, intensifying financial pressure across the industry.

Planned capacity additions of up to 138.8 million mt through 2028 represent a 5.7% increase from 2025 levels, with most expansion occurring outside the OECD area.

-- S&P Global Commodity Insights