The U.S. steel industry and other manufacturers decried China's move to devalue its currency, which makes Chinese steel and other exports artificially cheaper.

"This action is further illustration of the Chinese government's active role in manipulating the value of its currency to promote Chinese exports," American Iron and Steel Institute President and Chief Executive Officer Thomas Gibson said.

"China has consistently intervened directly in foreign exchange markets to control the value of the yuan versus the U.S. dollar to make their exports more competitive and impose new barriers to imports. Our government must address the massive damage that China’s undervalued currency is causing to our nation’s manufacturing sector, especially the steel industry."

Gibson said the U.S. government should officially declare China to be a currency manipulator.

Steelmakers around the world have criticized China, which they have blamed for having as much half of the world's steelmaking overcapacity.

Overcapacity has bedeviled the steel industry, depressing prices and leading steelmakers to dump steel at below-fair value prices on foreign shores.

An industry report by E&Y estimated 10 to 15 percent of steelmaking capacity worldwide would have to be idled or shut down over the next few years, just to restore prices to a profitable level for the industry. As many of 300 million tons might need to be taken offline over the next decade.

Steel industry analyst Charles Bradford said China built more steel mills than it needed during its period of rapid growth, but now had newer mills that can operate more efficiently than those that were built a century ago in places like Northwest Indiana.

U.S. steelmakers have said the Chinese steel that's flooded the market is cheaper because of government subsidies and currency that's kept artificially low to make imports into China more expensive and its own exports more competitive.

The yuan depreciated 3 percent against the U.S. dollar on Monday and Tuesday, which was the largest two-day depreciation since 1994, according to a PNC Bank economic report. The yuan is at its lowest level in four years after Chinese growth slowed and Chinese exports declined by 8.4 percent compared to July 2014.