China's steel companies, which registered deficits during the first five months of the year, had a total loss of 11.75 billion yuan ($1.9 billion), about 27 times more than at the same period last year, according to the China Steel and Iron Association.

Last year, the companies had a total loss of 414 million yuan in the first five months of the year.

An analyst at the association said that rising raw material costs and falling steel prices are the main reasons behind the losses.

"Steel makers' profits are being squeezed," he said. "Demand from downstream is falling and oversupply production capacities still exist in the market, which adds difficulties for steel makers."

Large and medium-scale steel companies in the country had a profit of 2.53 billion yuan during the first five months, 41.56 billion less than at the same time last year, according to a report in Economic Information.

This is the fifth successive month of losses for the steel industry.