CHINA June 26 2015 2:35 PMTweet

BEIJING (Scrap Register): Crude steel production in China is expected to decline by 2% from a year earlier to 807 million tons this year, according to the China Iron and Steel Association (CISA).

That is lower than the group's March estimate of a 1.1% decline and would be the first contraction since at least 1990.

According to CISA, the greatest factor of this reduction is profitability; the market is speculating that producers and traders are holding back supplies in an effort to push up prices.

Li Xinchuang, CISA's deputy secretary-general, said in an interview this week, "Low prices will be with us for a long time. So will tepid demand and zero growth, or even contraction, in output."