The Chinese steel industry may suffer losses in the third and fourth quarters due to the government's decision to remove exports rebates, putting further pressure on mills. Those mills have already suffered from falling product prices and soaring raw materials costs.

Rebates on hot-rolled coil and some cold-rolled coil and galvanized products will be removed starting July 15. Currently,  the rebates of hot-rolled coil and cold-rolled coil are 9 percent and 13 percent respectively.

The decision to remove export rebates comes amid growing export risks imposed by trade measures from the United States and European Union. In addition, the Chinese government is striving to cut energy consumption and eliminate outdated production methods.