Slowing property investment and weakening manufacturing have dragged down Chinese steel demand this year, according to an industry report released on Monday.

Chinese domestic demand for steel will fall by 4.8 percent year on year to 668 million tonnes in 2015, said a report released by China Metallurgical Industry Planning and Research Institute.

Steel demand will continue to shrink in 2016, dropping 3 percent year on year to 648 million tonnes, said the report.

Globally, the world steel demand will fall by 2 percent in 2015 and 0.9 percent in 2016 to 1.51 billion tonnes and 1.5 billion tonnes, respectively.

Meanwhile, slowing steel demand has in turn reduced profits for steel makers and forced small players to exit the market.

China's large and medium-sized steel mills suffered a loss of 72 billion yuan (11.34 billion U.S. dollars) in the first ten months of 2015, according to China Iron and Steel Association (CISA).