China's 27 major steel companies saw a 15.7 percent decrease in the first-half profits from a year earlier, the Economic Information Daily reported.

The profit of the 27 companies totaled 10 billion yuan ($1.6 billion), according to the Shanghai-based information agency Wind Info, as soaring iron ore costs largely eroded the operating income.

Meanwhile, Australian group BHP Billiton, the world's biggest miner, posted on Wednesday a first-half profit of $13.1 billion, which is more than eight times of the total profit of the 27 Chinese steel companies, thanks to the strong demand that boosted the prices for iron ore.

Tight Monetary policies, as well as the weak demand from downstream industries such as real estate and auto, will add to the financial pressure of the steel industry, analysts said.

By Sun Yuanqing