China's steel oversupply may worsen in the fourth quarter and into next year as the market weakens, according to the China Iron and Steel Association (Cisa).

"We can never be blindly optimistic regarding the steel sector in the fourth quarter, due to consideration that the glut (of steel) may further deepen," the association said on its Web site.

"As inventories in the market and at mills have been rising, domestic steel prices may further slide, company profits will fall, more mills will become loss-making and the steel industry will face a more difficult business environment in the fourth quarter and early...