China's steelmakers are struggling to make ends meet as acute costs inflation squeezes their profits.

The China Iron and Steel Association (CISA) said 80 large steelmakers across the country raked in combined profits of 42.8 billion yuan ($6.6 billion) in the first five months of this year, falling 2 percent from the previous year. Their profit-to-sales ratio averaged 2.91 percent, down 0.67 percentage points from a year ago.

Surging iron ore prices have put Chinese steelmakers in a tight spot. China imported 280 million metric tons of iron ores from January to May, growing 8.1 percent from a year earlier. The average import prices stood at $159.6 per ton, compared with $108.1 per ton a year ago, according to data from the General Administration of Customs.

Meanwhile, because of lackluster domestic demand, three larger steel-makers have lowered their steel prices for July, including Baosteel, Ansteel and Wusteel.

"Downturn in the automobile and machinery industries has made a dent on demands for steel," said Wang Zhaohua, an analyst with the Sinolink Securities Co. Ltd. "But massive construction of affordable housing will help cushion the blow."

In response, the steelmakers are supposed to focus on costs control and tighten efforts to improve operation efficiency, said Luo Bingsheng, Deputy Director of the CISA.