BlueScope Steel on Monday urged Australian federal government to do more to help the steel manufacturing sector, as it suffers under the impact of the strong Australian dollar.

On Monday, BlueScope announced a net loss of 55.8 million U.S. dollars for the six months to the end of December.

It made a loss of 28.4 million U.S. dollars in the same period a year earlier.

According to BlueScope's CEO Paul O'Malley, the rising Australian dollar is conspiring against the domestic steel industry.

O'Malley went on to say higher raw material costs more than offset higher steel prices, while the lower steel demand in the Australian market will continue to be a strong influence in the second half of the financial year.

"The manufacturing sector in Australia is at risk of actually being gutted if we don't ensure that we set up the right policies to have competitive manufacturing in Australia," he told ABC News on Monday.

"We need some policies from a government perspective that, instead of adding costs or taking away benefits, we work to achieve a lower bureaucratic cost burden on manufacturing businesses."

O'Malley also added that although there are signs of stronger industrial activity in the developed world, steel supply, excluding China, remains in an oversupply position.

He said the industry needs to see gross domestic product (GDP) in the developed world improve, and drive increased steel demand to narrow the supply and demand gap.