Chinese steel and iron ore futures rose on Thursday, pulling away from all time lows reached earlier in the week, as an improved performance by the country's manufacturing sector helped repair sentiment battered by a bearish demand outlook.

The most-active rebar for October delivery on the Shanghai Futures Exchange advanced 0.8 percent to CNY 3,096 (USD500) a tonne, after falling to an all-time low of CNY 3,055 on Wednesday.

Iron ore for delivery in September on the Dalian Commodity Exchange gained 1.3 percent to CNY 715 a tonne, moving away from a contract low of CNY 695 reached on Tuesday

The HSBC Flash China Manufacturing Purchasing Managers' Index recovered to a five -month high of 49.7 in May from April's 48.1.

But the figure is a tad below the 50 point level that separates growth in activity from a contraction, indicating that manufacturers actually experienced a slight drop in business.