China's major steel mills report rising losses

Almost half of China's large- and mid-sized steel mills reported losses during the first nine months of the year, the China Iron and Steel Association said Wednesday.

Combined losses amounted to 26.73 billion yuan (4.24 billion U.S. dollars), marking a 41.5-fold increase in losses year on year. Last year's losses were 644 million yuan.

The steel companies' sales fell 6.49 percent from one year earlier during the first three quarters, due to a slowing economy and oversupply, said Wang Xiaoqi, vice president of the association.

China's apparent consumption of steel rose 2 percent to 510.28 million tonnes during the first nine months, slower than the 11.73-percent increase seen in the same period last year, data showed.

Demand has softened in the world's largest steel-producing nation since the start of the year, as the country scaled back investment in rail construction and property development amid a slowing domestic economy.

"The steel industry is facing continued challenges because of weak steel prices and a rebound in iron ore costs," Wang said.

However, Wang predicted demand recovery in the fourth quarter with the implementation of pro-growth measures rolled out by the government. These included more aggressive fiscal spending, structural tax reduction, monetary loosening and state-run sectors opening to private capital.

"Steel prices rose slightly in late September, showing signs of a recovery in the steel market. Demand may improve in the fourth quarter," he said.