Crude steel. [Photo: sina.com]

Official figures show that China's annual crude steel output fell 2.3 percent year on year to about 800 million tons in 2015.

The drop is the first one in the last two decades, as the industry has struggled with persistent overcapacity.

Industrial overcapacity in sectors like steel and cement has become a major drag on the broader economy.

The Chinese government has banned new projects in steel, cement and electrolytic aluminum to solve the problem.

Fitch Ratings has predicted China's steel production capacity is likely to peak in 2016 as eliminated capacity gradually outpaces new capacity.