Bloomberg reported that China’s major steelmakers had a combined loss of CNY 699 million (USD 114 million) in June, the first monthly loss of this year, as a market glut weighed on prices.

China Iron and Steel Association said that stockpiles held by traders rose to 15.46 million metric tons as of June 30, up 30% from the start of the year, the producer-funded group said today in a statement on its website. Still, June inventories were lower than the 19.97 million tons as of the end of March.

China is studying a plan to reduce overcapacity in steel, cement, aluminum and other industries after output increased without effective supervision, the official newspaper of the Communist Party reported. Premier Li Keqiang has pledged to curb excess production, which Chinese authorities have cited for driving down the prices of industrial goods and eroding company profits.

CISA said in the statement that “The market glut won’t be relieved in the second half without an effective control on steel production as the inventories remain high.”

The association said that the 86 mills had aggregate profit of CNY 2.27 billion in the first half and an average profit margin of 0.13%, which is the lowest level of all industries of the country.

It said that apparent consumption of steel advanced 6.8% to 364.8 million tonnes in the first half from a year ago, the group said. Real demand growth was slower than that because of the high inventories.