China’s leading steelmakers warned the industry faces a very challenging second half as demand disappoints, profitability lags, and pressure to cut costs mounts in the world’s top producer. 

Representatives from China Baowu Steel Group Co., Ansteel Group Co., Hesteel Co. and Hunan Iron & Steel Group Co. said they are “not optimistic” about the coming six months, the China Iron & Steel Association said after the four companies attended a meeting organized by the industry body this week.

“The peak inflection point for steel demand has emerged, while the problems of insufficient end-user consumption, and ongoing thin margins are particularly prominent,” the CISA said in a statement, citing the quartet of companies.

Mills in China — which account for more than half of global steel production and are the largest importers of iron ore — have struggled this year as the nation’s recovery has stalled while a property crisis dragged on. Data released on Friday showed that manufacturing contracted again in June, adding to a string of soft figures. While that’s led to calls for more stimulus to prop up growth, officials in Beijing have so far refrained from significant measures.