Chinese large and medium-sized steel makers lost 3.31 billion yuan ($485 million) in the first quarter as overall steel output increased, China Iron and Steel Association (CISA) announced Wednesday.
The losses in March alone stood at 1.79 billion yuan, CISA vice president Luo Bingsheng told a work conference.
"The increased steel output in the first quarter is the major reason for the losses," he said.
In the first quarter, 20 out of 72 large and medium-sized member steelmakers reported losses, while during the same period last year, the steel sector reported profits of 47.16 billion yuan.
Crude steel output rose 1.74 million tons year on year in the first quarter to 124.7 million tons. Daily steel output stood at 1.41 million tons, which was equivalent to 517 million tons a year, significantly higher than the annual goal of 460 million tons.
Steel prices had fallen to the 1994 level, Luo said.
Steel exports fell 50 percent year on year to 5.14 million tons in the first quarter, and "steel for export was sold on the domestic market, which played a big role in the supply increase," he said.
CISA honorary president Wu Xichun blamed the increased capacity on small and medium-sized steel producers.
"Seventy-two CISA members reduced steel output from an average of 1.14 million tons per day to 1.11 million tons, but the small and medium-sized companies increased daily production from 290,000 tons to 340,000 tons," he said.
He called for the elimination of companies using outdated technologies.