China's major steel mills report rising losses (2)

"The steel industry is facing continued challenges because of weak steel prices and a rebound in iron ore costs," Wang said.

Higher operational costs were also squeezing steelmakers' margins. In the Jan.-Sept. period, major steel mills' financial costs surged 29.18 percent year on year, and their debt to asset ratio rose to 68.49 percent at the end of September, according to the association.

In the face of widening losses, steelmakers recognized the importance of battling with overcapacity, a problem that has beset the industry for years.

Steel output growth slowed and inventories dropped as the government restructured the industry and some steelmakers cut production.

Steel output rose 5.7 percent year on year during the first nine months, down from the 13.9-percent increase registered during the same period last year.

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