Continuous slide of steel price for ten weeks running has reversed the fast growing momentum of China's steel industry and will likely put it on a passive adjustment course, said Xu Lejiang, chairman of China's top steel maker BaoSteel Group.

According to statistics, the country's output of pig iron and steel products in Aug. saw an unusual negative growth of 1.5 percent and 0.2 percent on year respectively, which also represented a sharp fall in growth rate of 17.4 and 23.9 percentage points respectively from the year earlier period. The year-on-year output growth of crude steel in August was 1.3 percent only, also down 12.3 percentage points from the year earlier period.

Four major steel plants in north China including Shougang Group, Hebei Iron & Steel Group, Jigang Group recently announced to reduce their output by 20 percent respectively, and the move may be followed by Baosteel.

The pig iron output of non-key steel enterprises also declined in the first eight months of 2008, which is regarded as a sign for small steel mills to step out of the market.

Some analysts predicted at the beginning of 2008 that the growth of China's steel industry might lose momentum for sharp hikes of raw materials and fuel prices. Now, the industry is also feeling the pains of slowing demand.