China's 88 large and medium sized steel mills monitored by the China Iron and Steel Association posted a 61.3% increase in profit from a year ago to CNY 22.656 billion in the first ten months of the year but the rate of return on sales remained low at mere 0.75%.

Mr Li Xinchuang, deputy secretary general of the industry body, said that China’s steel demand was in persistent weakness, as evidenced in higher growth rate in the country’s steel exports than domestic production.

China's crude steel production rose 2.1% YoY to 685 million tonnes in the first ten months, with the pace narrowing 6.2% from the same period last year. The daily production volume in the January to October period hit 2.254 million tonnes, equivalent to an annualized level of 823 million tonnes. Exports of steel products totaled 73.89 million tonnes in the first ten months, a sharp gain of 42.2% from a year earlier, while the import volume only grew 4.1% on year to 12.09 million tonnes.

Mr Li said that China's steel prices basically remained in downward path since this year except a modest pick up in April. The China Steel Price Index slumped to 85.64 points as of late November, down 13.32 points from early this year. However, steel mills saw an improvement in profit, helped by the slump in iron ore prices.

CISA’s member mills achieved sales revenue of CNY 3.01 trillion in the first ten months, a modest decline of 1.03% from the corresponding period last year. However, 21 steelmakers were in deficits, with combined losses totaling CNY 9.014 billion down 24.1% from a year ago.

Mr Li said that the iron ore price will be an important focus of attention among industry insiders in the future, while expecting it to fluctuate between USD 70 and USD 80 based on calculations of global iron ore costs. Supply in global iron ore market increased sharply with Rio Tinto’s capacity expansion plan, but demand for the steelmaking ingredient was not strong, especially from China, the world’s biggest buyer of the material, where steel output growth decelerated significantly amid slowing economy and strict environmental protection measures.

Mr Li also forecast China's pig iron output in 2015 to rise 1.6% YoY to 732 million tonnes, meaning that around 1.157 billion tonnes of iron ore would be consumed. China’s iron ore imports are expected to grow 6.4% YoY to 1 billion tonnes in 2015.