China's steel industry improved its profitability in the first seven months, due to rising steel prices.

"The steel sector was in loss in the last quarter of last year, steel companies are in better conditions this year," said Qu Xiuli, vice executive sec., China Iron & Steel Association.

"Profit from January to July reached 16.3 billion yuan. It's expected that the sector also grew in August. Looking at the entire year, total earnings is not a big problem."

China Iron and Steel Association says China's steel industry has suffered a loss of 5.4 billion yuan. The improved operation was boosted by a rebound of steel prices.

Meanwhile, due to continued loss in the sector, many companies stopped production, which rebalanced supply and demand. And that also helped the sector to swing back to profit.