Experts say China steelmakers are in toughest situation in 20 years

China's steel industry is in its toughest year in two decades, with falling prices, weak demand and overcapacity leading to mergers and acquisitions, industry experts said.

In the first two months of 2014, large and medium-scale Chinese steel companies ran a total loss of 2.8 billion yuan ($454 million), Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute, said at Saturday's 5th China Steel Planning Forum, held by the institute. The loss worsened in March, he said.

"Solving overcapacity is key to various problems of China's steel industry," Li said. "Many Chinese steel companies face operational difficulties and obstacles to upgrading while many problems in the industry are closely related to overcapacity."