China's steel industry expects solid profits in 2021, even as full-year output is estimated to have fallen by 35 million tons from a year earlier to some 1.03 billion tons, said the China Iron and Steel Association.

The latest data from the industry's top association showed profits of its member enterprises, or key steel enterprises in China, surged by more than 86 percent to hit a historic high of 351.7 billion yuan ($55.2 billion) during the first 11 months of 2021.

Combined revenue of the enterprises exceeded 6.33 trillion yuan during the period, growing more than 36 percent year-on-year.

The stellar top and bottom line performances were achieved amid the nation's endeavors to realize its climate goals of peaking carbon dioxide emissions by 2030 and reaching carbon neutrality by 2060.

By the end of 2021, a total of 34 steel enterprises had completed officially recognized procedures of ultralow carbon emissions transformation, including facility upgrades, expert review and public opinion soliciting. Their combined capacity was 225 million tons, or about 23 percent of the nation's total steel capacity.

Another batch of 61 steel enterprises are expected to be announced for public opinion soliciting soon, which is considered the final stage of transformation. Moreover, 94 steel enterprises have been included in a green factory list designed by the Ministry of Industry and Information Technology.

Industry experts and officials said China will see stable steel demand in 2022, thanks to upbeat demand from sectors such as infrastructure and manufacturing, although the real estate industry is expected to exhibit weaker demand.

They also urged the industry to seek high-quality development based on green and low-carbon growth pathways and technological innovations, as it faces challenges such as overcapacity, reliance on imported iron ore and tightening environmental protection requirements.

"We must deepen supply-side structural reform and advance green and low-carbon development to realize stable operation of the industry this year while furthering high-quality development," said Chen Derong, chairman of CISA.

Efforts must be made to strengthen coordination and cooperation on technological innovations throughout the upstream and downstream industries, especially for those technologies related to green and low-carbon development and smart manufacturing, Chen said.

Joint efforts will be needed to develop first-in-class and customized steel products for key areas such as energy engineering, high-end precision instruments, traffic and transportation, and construction, he added.

Lyu Guixin, an official with the raw materials department of the MIIT, said the iron and steel industry must join hands with upstream and downstream industries to secure supplies and stabilize prices, while stepping up technological upgrades to improve product quality.

The industry must also enhance surveillance and risk prevention to reverse the downturn in development momentum, Lyu said.

In November last year, more than 30 percent of key large and medium-sized steel enterprises reported losses. Demand from downstream industries has been weakening since the third quarter of 2021, and year-on-year growth of the steel industry in the past five months was all negative, according to Lyu.

The CISA said profits of its member enterprises in November dropped by 64 percent from October to 9.2 billion yuan.