The Overcapacity Trap - Barriers to Entry and Exit in Steel

Global steel faces 721 million tonnes surplus capacity by 2027 with utilisation falling to 70%. Dual barrier structure creates vicious cycle: state subsidies undermine natural entry barriers enabling uneconomic expansion, whilst £4-5 billion exit costs trap capital even during extended unprofitability. Four strategic interventions offer solutions: ownership screening preventing inappropriate acquisitions, enhanced environmental permitting, CBAM carbon pricing, and comprehensive closure programmes modelled on Germany's €40 billion coal phase-out.