Reuters reported that Chinese steel futures rose for the first time in 7 sessions on a pick up in seasonal demand but gains were limited by chronic oversupply and slow manufacturing growth.

Benchmark October rebar futures on the Shanghai Futures Exchange had inched up 0.6 percent to CNY 3,251 per tonne by 0216 GMT. They had lost 4% in the previous six sessions.

The most active iron ore contract on the Dalian Commodity Exchange, for September delivery, had rebounded half a percent to CNY 779 by 0216 GMT.

Mr Qiu Yuecheng an analyst with steel trading platform Xiben New Line Company Limited in Shanghai said that "Rebar futures have fallen too much and the downside room is limited, but I don't expect gains to be big as steel consuming sectors have lost steam, capping steel demand."

A preliminary survey showed that China's factory activity shrank for the fourth straight month in April, signalling economic weakness had stretched into the second quarter although the pace of decline eased helped by policy steps to arrest the slowdown.

The HSBC/Markit flash Purchasing Managers Index for April rose to 48.3 from March's final reading of 48.0, still below the 50 line separating expansion from contraction.