Global Metals & Mining: Steel capacity additions enough to meet only a 0.5%-1.4% p.a demand growth over ‘25-‘28

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Global Metals & Mining: Steel capacity additions enough to meet only a 0.5%-1.4% p.a demand growth over ‘25-‘28

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02 Jul 2026 09:00:00 ET │ 9 pages

Global Metals & Mining

Steel capacity additions enough to meet only a 0.5%-1.4% p.a demand

growth over '25-'28

Ephrem Ravi AC

CITI'S TAKE +44-20-7986-2462

47mn tonnes of steel capacity 'under construction' and a further 92mn ephrem.ravi@citi.com

tonnes 'planned' during '25-'28 according to the OECD. The amount of new Wenyu Yaosteel capacity ‘planned’ is c.10mn tonnes higher than a year ago,

unsurprising as global steel demand growth has stalled over the last couple +44-20-7986-4551

of years. Over 75% of the new capacity is in Asia and Middle East where wenyu.yao@citi.com

demand is growing and for the capacity that is coming up in developed Jack Shang, CFA

markets it is likely to be offset with closures of old furnaces. The new jack.shang@citi.comcapacity under construction is enough to meet only a 0.5% p.a. demand

growth rate and even assuming 'planned' capacities come onstream by Krishan M Agarwal

2028, it is only enough to meet a 1.5% p.a. growth rate. Also note that these krishan.agarwal@citi.com

are gross additions, does not take into account closures and we expect only

very small increases in the medium term. Tom Mulqueen

tom.mulqueen@citi.com

The 3-year forward gross capacity additions at 129 mn tonnes at 2Q’ 26 — When Shashi Shekhar, CFA

the OECD issued an update of its estimate of capacity under construction for 2024-

shashi.shekhar@citi.com27 it was 165mn tonnes, but rolling that forward by a year is only 129 mn tonnes in

2025-2027. However, only around 36% of that is actual projects 'under Omnath Sinh

construction' and the rest are 'planned'. The proportion of projects 'under omnath.sinh@citi.com