China's steel association has criticized some mills for ignoring calls to cut production, Bloomberg reported. In September 2026, approximately 56% of its key member steelmakers were operating at a loss as weak demand, increased supply and high raw material prices squeezed the sector.

Losses across more than half of the key member mills illustrate the pressure on producers' margins: weak demand and increased supply can limit their ability to recover high raw material costs through steel prices. The association's criticism also points to the difficulty of coordinating output reductions across the industry.

The effect on the supply-demand balance will depend in part on whether mills adjust production and how demand and raw material costs develop. The reported loss figure alone does not establish how much output will change or when profitability might improve.