GUANGZHOU - A fund to cut excessive steel output is being considered as China makes reducing overcapacity one of its top priorities in the next five years, an industrial association said on Tuesday.

The China Iron and Steel Association said the steel industry will be chief among a number of sectors that will have to slash production amid weak demand in the coming years.

The fund is being considered for that purpose, it added, but did not offer the size of the fund or details of operation and participants.

Crude steel output edged down 2.23 percent during the first ten months this year to 675 million tons, and yet only 87.5 percent were actually used in the same period.

The excessive stockpile has dragged down prices and hurt profits, with 46.7 percent of steel produced by companies under deficit.