The Organization for Economic Cooperation and Development (OECD) on Tuesday clinched a landmark agreement to reduce excess steel output by 100 million tons, roughly 9 percent of the global steel production capacity, by 2010.
The agreement, reached after two days of talks among senior officials from 40 major steel producing countries, marks the first time that the OECD has managed to coordinate efforts to remove excess capacity and to ward off potential sanctions from the United States, the world's biggest steel importer.
The OECD agreement calls for slashing steel output by 61 million tons to 65 million tons by the end of 2003, an additional 9.5 million tons by the end of 2005, and another 23 million tons by 2010. The aggregate cut would be equivalent to 9 percent of the existing global production capacity in terms of crude steel.
According to OECD figures, the global steel production capacity has reached 1.07 billion tons annually in terms of crude steel.