(Yicai) Jan. 21 -- Profits in China's steel industry halved last year due to weak demand, prompting an industry association to call on producers to limit excess output and price wars.

Key enterprises monitored by the China Iron and Steel Association earned CNY42.9 billion (USD5.9 billion) in annual profits, down 50 percent compared to 2023, the CISA announced yesterday. Revenues dropped 6 percent to CNY6 trillion (USD824.9 billion), and the average profit margin fell to 0.71 percent from 1.34 percent.

The domestic steel market is facing a severe imbalance between supply and demand, with insufficient self-discipline among enterprises in controlling capacity expansion, Chairman Yao Lin said at a members' meeting held yesterday. Malicious competition continues to disrupt market order, leading to a sustained decline in the industry's performance in recent years, he added.

Enterprises should scientifically and accurately assess the industry's development stage, further strengthen self-discipline, and prevent vicious competition, Yao noted.

In recent years, affected by deep adjustments in the real estate market, China's steel demand has remained sluggish. After reaching a historical peak of 1.05 billion tons in 2020, crude steel consumption has declined for four consecutive years, dropping to 892 million tons last year, according to CISA statistics.

However, producers have been slow to respond to falling consumption. After an all-time peak of 1.05 billion tons in 2020, crude steel output has dropped each year but still remained around one billion tons last year, according to data released by the National Bureau of Statistics.

This year, China will expand domestic demand by implementing more proactive fiscal policies and moderately loose monetary policies to effectively support steel demand, according to a recent report by the China Metallurgical Industry Planning and Research Institute.

Steel demand in industries such as machinery, automotive, energy, shipbuilding, home appliances, and furniture is expected to show growth, while demand in construction, railways, containers, and hardware products is predicted to continue declining, the report added.

Editors: Dou Shicong, Emmi Laine