According to statistics from China Iron and Steel Association, 86 large and medium-sized steel mills had a combined profit of CNY 11.276 billion in the first nine months of this year. They had a profit of CNY 3.266 billion in September, hitting a year to date high.

In the first half of this year, steel mills are wandering on the verge of deficit as their profits are squeezed by weak demand and low price. As of the end of June, 2013, China's 86 large and medium-sized steel mills had a combined profit of 2.267 billion yuan and average sales profit was merely 0.13%. However, they are out of the red in July and August after embracing a round of rebound. Steel price keeps dipping since September and the increase in profit should be attributed to benefits from non-steel business.

Steel inventory of China's large and medium-sized steel mills totaled 13.788 million tonnes in middle October, a rise of 2.12%. It was only inferior to the higest level of 14.51 million tonnes in middle March.

China steel market might continue vulnerable fluctuation in the fourth quarter of this year as inventory of key steel mills and crude steel production sustains high on weak demand.