China's iron and steel makers have seen their profits plummet by 95.81 percent in the first half of the year from the same period a year ago on weakening demand and rising costs, the China Iron and Steel Association said on Tuesday.

Net profits for the CISA's business members were 2.4 billion in the six months, with their sales margin falling to 0.13 percent from last year's 3.06 percent, and net losses across the industry hitting more than 1 billion yuan, the association told a news conference.

Chinese media reported yesterday that the country's top economic planner may revive tax rebates to bolster the steel sector, a move widely believed with little affect by analysts.

Under the proposed measure, the government would restore a value-added tax rebate on some high-end steel products purchased from domestic steel mills by plants that usually rely on overseas suppliers.

"It may take more than that to solve the substantive problem," said Hu Yanping, an analyst with Custeel.net, "The industry should not run to policy's rescue whenever it has problems."

The analyst predicted the proposal, which had appealed to the Ministry of Industry and Information Technology, will have small chances to get approved.

China introduced similar policies in 1998 and 199, when steel mills couldn't even make a payroll. "The industry is bad now, but now that terrible," Hu said.

"That could end up as subsidies to loss-making state-owned companies, and it would just help a little to save the steel companies and the industry," a security dealer researcher said, "There will be an industry reshuffle under market forces."