AISI Says China Report on ‘So Called Excess Capacity’ Fundamentally Flawed

WASHINGTON, D.C. — Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), today provided the following statement on a new position paper published by China’s Ministry of Commerce on excess manufacturing capacity.

“Global overcapacity is not as the Ministry of Commerce’s report suggests, a fiction. Excess capacity in the global steel industry has been extensively documented by the Organization for Economic Cooperation and Development (OECD) and remains a serious threat to the American steel industry. According to the latest OECD analysis, global steel overcapacity is projected to surge to 745 million metric tons (MMT) by 2028, up from 640 million metric tons in 2025. China is one of the leading sources of overcapacity in the steel sector, although other nations are also a threat. In fact, China’s steelmaking capacity in 2025 represented almost half of total global capacity and more than twice the combined steelmaking capacity of Brazil, Canada, the EU, Mexico, Japan and the United States. In 2025, in the face of multiyear declines in Chinese domestic steel demand, Chinese steel exports accelerated to 131 million metric tons, as much as all of North America’s steel consumption combined.

“China’s heavily subsidized steel industry has proven overcapacity, which no amount of ramping up of domestic demand could absorb. In fact, according to the OECD, Chinese steel firms in 2024 received 15 times as much in subsidies relative to their asset size as steel firms in the rest of the world. A near doubling of China’s steel subsidy rate since 2019 has fueled Chinese oversupply and its steel export surge.

“Substantial government involvement in the Chinese steel industry is the underlying problem driving its subsidies and other non-market policies and practices. This is evident in the Ministry of Commerce report, which refers repeatedly to government five-year plans and other government directives that guide the Chinese industry, leaving no room for market forces to operate. Clearly, China’s steel policies are designed to undermine market-driven steel industries in the United States and other nations.

“AISI continues to support aggressive enforcement of U.S. trade laws to level the playing field and ensure the competitiveness of the American steel industry. The Section 232 steel tariffs implemented by President Trump are spurring investment and helping to create a competitive environment for American steel producers to ensure a stable industry that can continue its critical role in America’s defense and the health of the U.S. economy. We look forward to working closely with the administration as it pursues additional actions to address structural overcapacity in China and elsewhere under Section 301 of the Trade Act of 1974.”

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Contact: Kim Stewart

202.452.7126 / kstewart@steel.org

AISI serves as the voice of the American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI’s membership is comprised of integrated and electric arc furnace (EAF) steelmakers, steel pipe and tube manufacturers and steel processors and fabricators, reflecting the production and distribution of both carbon and stainless steels. These steels are critical to America’s national and economic security, including roads and bridges, buildings, the electrical grid, cars and trucks and all clean energy technologies. AISI also represents associate members who are suppliers to or customers of the steel industry. For more news about steel and its applications, view AISI’s website at www.steel.org. Follow AISI on Facebook, LinkedIn, Twitter (@AISISteel) or Instagram.