China's steel industry continued to suffer from weak demand and thin profits during the first quarter, and the situation could continue for the rest of the year as prices keep falling.

The latest data from the China Iron and Steel Association show that the profit margin across the domestic steel industry dropped to 0.9 percent, delivering collective industry profits of 2.5 billion yuan ($406 million) for the quarter.

Xue Heping, an expert with the association, said the profit level was too small for an industry with total assets worth 4.3 trillion yuan.