Overcapacity sends China's steel sector into loss

China's iron and steel industry reported a loss of 699 million yuan (about 113 million U.S. dollars) in June, the first monthly deficit that the overcapacity-troubled industry has seen this year. For the first half, the profits of members of the China Iron and Steel Association (CISA) hit 2.27 billion yuan, with an average profit margin of 0.13 percent, the lowest among all industries, said the CISA on Wednesday. Steel prices have been dropping since February. At the end of June, the prices of steel products fell 6.45 percent compared with the beginning of this year, and down 14.7 percent year year on, according to the CISA. Oversupply in the steel sector will continue amid the country's economic slowdown, the CISA warned, as the country has been pushing forward economic reforms. The 86-member CISA said the association will cooperate with government departments to solve the overcapacity problem. During the January-June period, CISA members saw their sales revenues reach about 1.8 trillion yuan, up 0.94 percent year on year. But 35 out of 86 CISA members reported losses, the association said. Regardless of the overcapacity problem, China's output of pig iron, crude steel and steel products still expanded to 357.54 million tonnes, 389.87 million tonnes and 516.96 million tonnes in the first half, up 5.7 percent, 7.4 percent and 10.2 percent year on year, respectively, according to the CISA.