Toughest quarter in years for steel sector

China's steel industry faces rising costs, shrinking demand and tight loans from banks. Those conditions made the sector's first quarter its toughest this century.

Weaker demand slowed growth in China's economy, the world's second-largest. Crude steel output increased in the first three months of this year, up 2.37 percent year-on-year, to 202.7 million metric tons, the China Iron and Steel Association said on Monday. That translates to daily output of 2.25 million tons and an annualized 822 million tons for 2014.

Severe overcapacity brought a 2.33 billion yuan ($377 million) loss for major domestic steel companies in the period, said Zhang Changfu, vice-chairman of CISA. It compares with a 3.3 billion yuan profit in the year-ago period.