World has steel glut, but no one wants to stop making it

A global plunge in prices, led by increased production in China and US tariffs, threaten steel manufacturing, which has long been a symbol of national might, writes Patricia Cohen from IJmuiden, The Netherlands

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At Tata Steel’s plant in IJmuiden on the outskirts of Amsterdam, cauldrons of lava-like molten steel are poured into long, thin trays that harden into identical 40-by-4-foot slabs of steel.

The end products, though, are strictly haute couture. Every item is made to order: battery casings that do not leak, crumple-zone car parts that absorb the force of a crash, cans that safely preserve food for years.

Very few companies in the world can produce this kind of advanced high-grade steel. Even so, Tata is being hit by the same forces that are pummelling every steel maker: Manufacturers are producing more steel than the world can possibly use.

Excess steel production is estimated to reach 721 million tonns by 2027, according to the Organization for Economic Cooperation and Development.

One answer would be to simply make less steel. The problem is that no country wants to be the one to stop producing a material that is considered essential to its economic and national security.

Steel-making has always held an outsize position as a symbol of economic power and prestige. It constitutes the fabric of modern life, used not only for buildings, roads, cars, refrigerators, electronics, forks and screws but also for weaponry, tanks and fighter jets.

In Europe, the recognition that the United States can no longer be relied on as the primary guarantor of its security has further underscored steel’s critical role in defence.

“Steel is fundamental to Britain's industrial strength, to our security and to our identity as a primary global power,” Britain's business and trade secretary, Jonathan Reynolds, told Parliament in April when the government passed emergency legislation to take control of the country’s last two operational blast furnaces.