A major report from the Organisation for Economic Co-operation and Development has confirmed what Australian steel fabricators have long argued: a worsening global glut of heavily subsidised steel is distorting markets, undermining competition and threatening the survival of market-based producers worldwide.
The OECD Steel Outlook 2026, released on 4 June in Paris, presents a sobering assessment of the global steel industry.
Global excess steelmaking capacity is projected to climb from 640 million tonnes in 2025 to 745 million tonnes by 2028, a figure that would exceed the combined annual steel output of all OECD member countries by 319 million tonnes.
Over the same period, demand is forecast to grow by just 34 million tonnes, while planned new capacity additions reach up to 139 million tonnes.
The OECD identifies the root cause as escalating government subsidies in major non-OECD steel-producing economies. In some countries, the median producer now receives up to 15 times more support relative to total assets than producers in market-based economies, up from a ratio of 10 times in 2023.
The outcome is a flood of artificially priced steel into open markets, with record export volumes reaching 131 million tonnes in 2025 alone.
The report also raises alarm over the future of sustainable steelmaking, warning that approximately one-fifth of planned low-carbon projects worldwide have been suspended due to unfavourable market conditions and unfair competition.
The subsidised overcapacity crisis is now actively impeding the global green steel transition.
For Australia’s peak steel industry body, the Australian Steel Institute, the timing of the report carries considerable weight.
The findings land directly in the middle of an ASI-initiated Productivity Commission Safeguard investigation into a surge of low-price imported fabricated steel entering the Australian market.
The ASI argues the OECD findings provide authoritative international validation for the case it has been prosecuting before the commission.
ASI chief executive Mark Cain said the report confirmed in unambiguous terms that subsidised overcapacity is causing real injury to market-based producers, and that Australian fabricators have been living this reality for years.
He called on the Productivity Commission to consider the OECD findings as part of the evidence gathered in the inquiry, describing the Safeguard investigation as the industry’s opportunity to respond with a targeted and proportionate measure of the kind the OECD itself endorses.
Australia’s Trade and Tourism Minister, Senator Don Farrell, was present in Paris for the OECD Ministerial Council Meeting at which the Steel Outlook 2026 was launched.
The minister stated his attendance was aimed at promoting trade and industrial policies that support open markets and deliver tangible benefits for the Australian economy, a position the ASI says directly supports its case for Safeguard measures.
The ASI lodged its application for Safeguard measures with the Australian government in late 2025, prompting the Productivity Commission inquiry now underway.
The inquiry has received 59 non-confidential and 21 confidential submissions and concluded a round of public hearings in May 2026.
Supplementary submissions have since been provided to the commission, including a detailed ASI submission reinforcing evidence of an import surge, industry injury and the public interest case for a tariff rate quota.
The ASI values sovereign fabrication capability at between $3.4 billion and $7.4 billion in net present value terms.
Industry participants have also placed their own evidence on the record.
Brezac Constructions, drawing on more than 35 years of operational experience, lodged a supplementary submission urging the commission to maintain focus on the direct relationship between the surge in imports and the injury sustained by the domestic fabrication industry.
The ASI acknowledged the contributions of all members and organisations who have participated in the campaign through lobbying, facility visits with politicians, submission preparation, public hearing evidence and supplementary filings.
The Productivity Commission is due to release its interim report by September 2026, after which all parties will have the opportunity to respond.
The ASI has indicated it will continue to advocate strongly on behalf of the industry throughout that process.