Economy
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/02aa7477fe77357a3e58216d94e07a15.jpg)
US Treasury Secretary: Overcapacity is Distorting Global Market
Written by Sandy Williams
June 6, 2016
The US Treasury Secretary told Chinese students at Tsinghua University that excess steel capacity is distorting the world market. The comments came ahead of talks in Beijing between the US and China on trade and security.
“Excess capacity is not just a domestic issue in China,” said Treasury Secretary Jacob Lew. “The question of excess capacity is one that literally has an enormous effect on global markets for things like steel and aluminum, and we’re seeing distortions in global markets because of excess capacity,” he said.
“Excess capacity ultimately is corrosive of an economy’s efficiency,” said Lew. “It means you have misallocation of resources, it means that ultimately, the only way to clear the market is to sell things at a price that is below what the world market price would otherwise be.”
The American Iron and Steel Institute estimates that global overcapacity in steel is about 700 million tonnes, 425 million tonnes of which is located in China.
During opening remarks at the annual Strategic & Economic Dialogue meetings, Chinese President Xi Jinping reaffirmed the country’s commitment to reducing overcapacity through production cuts.
“China will redouble efforts to promote supply side structural reform,” said Xi.
The meeting in Beijing is scheduled for Monday and Tuesday of this week with discussions focusing on a wide range of bilateral, regional and global economic and strategic issues. The meeting is chaired by US Secretary of State John Kerry and Treasury Secretary Jacob Lew and their Chinese co-chairs, State Councilor Yang Jiechi and Vice Premier Wang Yang.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/sandy-williams.jpeg)
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Metalformers expect steady conditions in coming months
Metalformers expect economic activity to stabilize over the next three months, according to the recently released July Business Conditions Report from the Precision Metalforming Association (PMA).
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/construction.png)
Architecture Billings Index rises from 4-year low in June
The Architecture Billings Index (ABI) ticked up in June following May’s four-year low, according to the American Institute of Architects (AIA) and Deltek. While the index improved this month, it continues to indicate weak business conditions among architecture firms.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/FedRes.png)
Beige Book: Uncertainty to continue fueling slower economic growth
Growth in the US economy continues to be constrained. The Federal Reserve’s Beige Book report for July shows more areas reporting flat or declining economic activity than in its previous report at the end of May.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/AISI.png)
AISI, AISC, University of Massachusetts get ~$6.4M EPA grant
The American Iron and Steel Institute (AISI), American Institute of Steel Construction (AISC), and the University of Massachusetts at Amherst have received a grant to enhance emissions reporting for steel construction projects.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/12/empire_state_1-scaled.jpg)
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in July, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.