Since National Day, steel markets in some regions have seen varying degrees of price increases, with some low-lying areas showing relatively notable gains, though most regions have maintained a steady, wait-and-see stance. Regarding the outlook for the whole of October, the industry generally believes the market will be dominated by weak fluctuations. Some analysts say, "Although downside room in October is limited, the situation is still not optimistic."

　　Given this year's "Golden September," steel prices have continued to slide, and problems such as persistent supply pressure have shown no obvious improvement, so traders' cautious attitude toward market operations remains unchanged. The latest inventory statistics from "Mysteel" show that as of October 8, total social inventory of the five major steel product categories (rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate) in major markets nationwide stood at 15.2911 million tonnes, an increase of 623,800 tonnes from before the holiday, significantly lower than the nearly one-million-tonne increase in 2012.

　　Traders Cautious in Ordering; Social Inventory Increase Limited

　　Since the beginning of this year, faced with continuously falling steel prices, traders have become increasingly cautious in their operations. During this year's National Day holiday, traders maintained this attitude.

　　According to the latest inventory statistics from "Mysteel," as of October 8, total social inventory of the five major steel product categories (rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate) in major markets nationwide stood at 15.2911 million tonnes, an increase of 623,800 tonnes from before the holiday, with construction steel and flat products each accounting for half of the increase.

　　It is worth noting that the increase of more than 600,000 tonnes represents a clear decline compared with last year's increase of nearly one million tonnes, and is the lowest post-National Day increase since 2009.

　　Although the increase in steel social inventory has been relatively limited, according to Glink Information, supply pressure in the steel market will not ease as a result.

　　Data from the China Iron and Steel Association show that in mid-September, key enterprises produced an average of 1.7795 million tonnes of crude steel per day, up 0.97% from the previous ten-day period, while estimated national crude steel output was 2.1435 million tonnes per day, up 0.66% from the previous ten-day period. In addition, inventories at key steel enterprises remain at a high level; at the end of mid-September, inventories at key steel enterprises stood at 13.22 million tonnes, up 625,700 tonnes, or 4.97%, from early September.

　　Industry insiders point out that, on the one hand, steel mills' crude steel capacity release has continued at a relatively high level, leaving mill inventories persistently high; on the other hand, changes in steel mills' business models have also meant that, since the beginning of this year, average end-user steel mill inventories have generally been higher than in previous years.

　　The source also said that in previous years, key steel mills carried out obvious destocking operations in the fourth quarter, "which will create greater pressure on future market resource supply."

　　"Golden September" Fades; October Still Not Optimistic

　　September is traditionally a peak season for steel sales, but amid supply-demand conflicts, funding pressure and other factors, steel prices continued to slide and market confidence was steadily eroded.

　　According to the Mysteel steel composite index, as of the end of September the index stood at 129.52 points, down 2.47% over the whole of September. Reversing its previous upward trend, it lost the brilliant color of Septembers past.

　　Xu Xiangchun, information director at Mysteel, said, "The pullback in steel prices in September shows that the recovery process of the steel industry is full of twists and turns."

　　In Hebei Province, the country's largest steel-producing province, the operating conditions of the steel industry fell again after a brief improvement in July and August. According to data released by the Hebei Provincial Metallurgical Industry Association, the Hebei steel industry PMI in September was 43.9%, down 9.7 percentage points from the previous month, the largest drop on record.

　　In addition, both the new orders index and the new export orders index showed clear declines. The new orders index in September was 40.9%, down 15.6 percentage points from the previous month, the largest drop on record; the new export orders index in September was 45.8%, down 8.3 percentage points from the previous month, indicating that foreign demand also weakened.

　　It is worth noting that although the steel industry PMI fell significantly, China's official PMI edged up to 51.1, rising for three consecutive months and indicating that manufacturing is still recovering. Steel mill inventories and social inventories still need to be further digested, and supply pressure in the market remains, with these bearish factors continuing to weigh on the steel market.

　　Some analysts believe the market will improve somewhat after fully digesting the bearish factors. At present, the market is still in a state of correction and consolidation. Since current steel prices have reached historic lows, the analyst said, "Although downside room in October is limited, the situation is still not optimistic."