Domestic Steel Composite Price Index made by the China Iron and Steel Association (CISA) dropped to 102 points, approximately the same with the figure in the year 1994. Backing to the original point, some experts say that this round of industry adjustment may exclude 20 percent of steel companies.

According to Wang Xiaoqi, deputy director of CISA, excluding export and adding of inventories, crude steel consumption decreased 3.6 percent in July.

Absolute consumption of crude steel has decreased, which means that the industry is ongoing a more serious situation than expected, said one of the experts of CISA, which forecast that the domestic steel demand will be at least "slow increase".

Not only steel and iron, market of iron ore has also stepped into downturn.According to TSI iron ore index, price of 62 percent grade imported iron ore has been under $100 per ton for a week, and may dropped to $90 per ton, decreasing 50 percent compared to the high position of last year.

"More 50 million tons of iron ore will be added to the global market compared to the supply in H1, but the demand will remain the same or even decrease", said Zhang Dianbo, general secretary of Baosteel Group Co.(600019.SH), iron ore supply will will step in "a balanced or slightly excessive situation", he added.

As domestic iron ore has higher cost than the globally average level, successively price decrease may hurt domestic iron ore companies first.