The China Iron & Steel Association says demand for steel in the country is likely to slow down in the near future. According to the association's forecast, China's steel output is likely to decelerate in the second half of the year, in line with slowing economic growth.

But steel oversupply will not change in short term, as output remains high against the backdrop of slowing growth in steel-consuming industries and growing difficulties in steel exports. Surging costs for raw materials, financing and labor is eating into big steelmakers' profits. Meanwhile, tight monetary policy will also continue to weigh on demand from steel consumers.