For Official Use DSTI/SC(2017)2 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 06-Apr-2017 ___________________________________________________________________________________________ _____________ English - Or. English DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INNOVATION STEEL COMMITTEE Use Official For DSTI/SC(2017)2 Cancels & replaces the same document of 14 March 2017 CAPACITY DEVELOPMENTS IN THE WORLD STEEL INDUSTRY 23-24 March 2017 Paris, France This document will be examined under the agenda Item 4 on steelmaking capacity developments. It provides an update of steelmaking capacity estimates for the world economy, based on information extending to December 2016. Potential gross capacity additions are provided until 2019, based on an update of the investment project database that is available in Annex 1. The document is for review and declassification by delegates on the Steel Committee. This report is a contribution to Output Result 1.2.5.1.4 of the Steel Committee's 2017-18 PWB Action required: For discussion and comment. Following sufficient review by delegates, this report will be declassified and made publicly available in the spring of 2017. Contact: Hokuto OTSUKA, Consultant, Structural Policy Division/Steel Unit, Email: [email protected], Tel.: +33 (0)1 45 24 14 83 English JT03412140 Complete document available on OLIS in its original format - This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of Or. English international frontiers and boundaries and to the name of any territory, city or area. DSTI/SC(2017)2 TABLE OF CONTENTS CAPACITY DEVELOPMENTS IN THE WORLD STEEL INDUSTRY ..................................................... 3 1. Introduction .............................................................................................................................................. 3 2. Background: monitoring steelmaking capacity developments ................................................................ 3 2.1. Existing steelmaking capacity ........................................................................................................... 4 2.2. New capacity additions ..................................................................................................................... 4 2.3. Plant and capacity closures................................................................................................................ 4 3. Global summary of steelmaking capacity developments ......................................................................... 5 4. Regional capacity developments, closures, postponements and cancellations ........................................ 9 4.1 Middle East ...................................................................................................................................... 10 4.2 Asia .................................................................................................................................................. 10 4.3 CIS .................................................................................................................................................... 11 4.4 Africa ................................................................................................................................................ 11 4.5 NAFTA............................................................................................................................................. 11 4.6 Other regions .................................................................................................................................... 12 ANNEX 1: PLANT-LEVEL INVESTMENTS ............................................................................................ 13 ANNEX 2: PLANT-LEVEL CLOSURES .................................................................................................... 16 ANNEX 3: WORKING DEFINITIONS USED ........................................................................................... 17 Steelmaking capacity .............................................................................................................................. 17 Steelmaking equipment .......................................................................................................................... 17 Assessing capacity developments .......................................................................................................... 17 Steelmaking capacity closures................................................................................................................ 18 Figures and tables Figure 1. World crude steelmaking capacity ............................................................................................... 5 Table 1. Crude steelmaking capacity developments .................................................................................... 6 Table 2. Potential gross capacity additions in the period until 2019 ......................................................... 11 Table 3. New investment data .................................................................................................................... 13 Table 4. Closure data ................................................................................................................................. 16 2 DSTI/SC(2017)2 CAPACITY DEVELOPMENTS IN THE WORLD STEEL INDUSTRY 1. Introduction 1. The Secretariat of the OECD Steel Committee provides monitoring reports on crude steelmaking capacity developments to members of the Committee on a regular basis. The last report was provided to delegates for discussion at the September 2016 meeting of the Steel Committee [DSTI/SU/SC(2016)6]. 2. This paper presents an updated and more comprehensive overview of recent steelmaking capacity developments taking place around the world, and provides an assessment of gross capacity additions in the period until 2019. The analysis also includes a brief summary, by region, identifying selected investment projects (including any postponements and cancellations of announced projects where applicable) and closures of capacity. 3. The information used to assess past capacity developments has been obtained from a wide range of publicly available and commercial data sources. The figures presented in this document are based on data available until December 2016. It should be noted, however, that developments have been evolving rapidly and that there are some uncertainties with respect to investment and, in particular, closure information. Therefore, the capacity numbers will likely be updated with incoming publicly available information on capacity closures taking place in 2016 and new information on the status of investment projects. Steel Committee delegates are encouraged to provide the Secretariat with any corrections or new information on steelmaking capacity developments. 2. Background: monitoring steelmaking capacity developments 4. The OECD began to monitor steelmaking capacity in the 1960s.1 The importance of continuing this work and enhancing the dissemination of capacity data is accentuated by the fact that the World Steel Association no longer provides assessments of capacity developments to its members. The OECD can therefore play an important role as a provider of objective capacity data to policy makers and steel industry stakeholders. 5. As noted above, the OECD Secretariat collects data on steelmaking capacity from a wide range of publicly available and commercial data sources. These data sources include both capacity databases and specialised media reports. This information has been used to construct three internal databases related to steelmaking capacity, described below. This activity provides important information for policy makers and also supports the analytical work carried out by the OECD Secretariat. 1 See L'Industrie sidérugique en 1965 et tendances en 1966, OECD, Paris 1966 3 DSTI/SC(2017)2 2.1. Existing steelmaking capacity 6. The Secretariat regularly updates aggregate steelmaking capacity data at the economy-wide, regional and global levels. In the 1990s, the OECD began to publish a two-yearly publication covering the existing steelmaking plants of non-OECD economies, which includes information on the main steelmaking technologies of the plants (e.g. basic oxygen furnace or electric-arc furnace), the installed downstream equipment, ownership and other plant characteristics.2 Country or regional aggregates are made available to the Steel Committee and information is sometimes published in declassified reports at oe.cd/steelcapacity. Changes in capacity over time are determined by new capacity additions net of permanent closures, described in more detail below. Table 1 below presents the Secretariat's nominal crude steelmaking capacity figures by economy and region in the ten-year period until 2016. 2.2. New capacity additions 7. In 2014, the OECD Secretariat started to compile a database of new investment projects taking place around the world, with a focus on announced iron and crude steelmaking projects. The database provides detailed information on installations, either underway or planned, of iron and crude steelmaking equipment by plant (e.g. DRI, BF, BOF and EAF), along with an array of other information related to the investment or plant, including the number of furnaces being installed, the associated total nominal capacity addition of the plant, the start-up year