CHINA’S steel association said 43 percent of its members lost money in the first half of this year, with the sector as a whole struggling with plummeting demand and prices at 20-year lows.

    In a statement published on its website, the China Iron and Steel Association (CISA) said its members made total profits of just 1.64 billion yuan (US$264 million) in the first six months of the year while their core steel business suffered aggregate losses of 21.68 billion yuan over the period.

    “Insufficient demand remains the major difficulty facing the sector,” CISA said, blaming lagging growth in steel intensive sectors such as machinery, automobiles and shipbuilding.

    The association said overall steel production in China is likely to have peaked last year, driven by record high exports, with domestic consumption actually peaking in 2013.

    “It is obvious that China’s apparent steel consumption has already entered the peak period, and big rises in market demand have already passed into history,” it said.

    Output in the world’s biggest steel producing nation reached 409.97 million tons in the first half of 2015, down 1.3 percent on the year.

    In 2014, crude steel output growth fell to its slowest in more than three decades, although apparent consumption actually dropped 3.3 percent, according to CISA figures.

    CISA, which represents around 100 large and medium-sized steel mills, said firms were facing more risk in the second half of 2015, with many likely to see further losses as a result of credit restrictions and pressures to repay existing debts.

    “Chinese steel firms are still struggling with credit line cuts and difficulties in rolling over loans as banks are still controlling lending to the sector,” CISA said.

    CISA also warned of the threat of anti-dumping measures in a sector that has relied on ramping up exports to keep it afloat over the past year.

    “Keeping exports at this level will help alleviate the contradictions between supply and demand on the domestic market, but ... there are already huge pressures from trade frictions.”(SD-Agencies)