Chinese steel futures dropped for a fourth session to hit an all time low on Tuesday, reflecting pressure on demand from a weak property sector and hefty supply as markets reopened after a holiday weekend.

The most active rebar for October delivery on the Shanghai Futures Exchange SRBcv1 touched a session low of CNY 3,040 (USD 490) a tonne, the lowest for a most traded contract since the bourse launched the product in March 2009. It closed down 0.4 per cent at CNY 3,057.

Given the risks in the real estate market, traders and end-users are not willing to increase their stocks and this is putting pressure on the mills. These risks had overshadowed recent signs of recovery in China's manufacturing sector.

The growth in China’s housing prices slowed to a near one year low in April, while property investment also lost steam in the first four months of the year as developers feel the pinch from slowing sales and rising borrowing costs.

China’s factory sector turned in its best performance in four months in May as export orders improved although activity still contracted, a private survey showed on Tuesday. A separate government gauge hit a five-month high in May.