Steel firms see their fortunes brighten in October

China's steel industry began to make a profit again in October after months of losses, a senior official said on Wednesday.

Wang Xiaoqi, vice-chairman of the China Iron and Steel Association, said market demand is likely to increase in the fourth quarter and lead to the industry's being in the black by year's end.

"The domestic steel industry has gone through one of its most difficult times," said Wang.

He said the industry will eliminate its deficits by the end of the year, noting that iron ore prices are becoming stable and the demand for steel is slowly increasing.

Chinese steel companies have been harmed by overproduction, increasing prices of iron ore and a falling demand.

China's large and medium-sized steel companies reported a total loss of 3.2 billion yuan ($514 million) for August, which some have deemed the "darkest month for the industry" this year.

But steel companies saw their fortunes improve a bit the following month, when they reported a total loss of about 2.4 billion yuan, Wang said.

"The price of iron ore will be on a declining trend in the long term," said Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute. "However, the rate of decline is decreasing."

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