China steel output falls 5.8 pct in 2012

China's steel industry is the biggest in the world, accounting for about 57 percent of global production in 2012. But the global economic downturn last year hurt the country's steelmakers massively.

Fresh data from the China Iron and Steel Association on Thursday shows that the country's crude steel output was around 717 million tonnes in 2012, down 5.8 percentage points from a year earlier. But even worse: steel mills saw profits slump by more than 98 percent to 1.58 billion yuan year on year.

The industry body says the slowing economic growth has decreased steel demand from downstream industries, such as the railway construction, property and shipbuilding sectors.

Besides, China's steel sector is still facing overcapacity, which caused steel output to greatly exceed market demand. But looking ahead, the association expects an improved outlook for the steel sector in 2013 as the economy gathers pace.