According to the China Iron and Steel Association, China Steel Price Index stayed below 100 points for the eleventh consecutive month to close at 90.63 points as of the end of August, 2014. It was the highest level since 2014 and marked fifth straight month of declines.

The figure was down 1.25 points or 1.36% from the end of July and down 8.51 points or 8.58% from a year ago. Steel production in China increased slightly in August, but steel prices hit intra year lows affected by slowing macroeconomic growth.

Daily crude steel production of key steel mills monitored by CISA hit 1.8263 million tonnes in mid August, up 1.53% or 27,600 tonnes from early in the month.

Meanwhile, iron ore prices suffered a big slump. The iron ore market remained oversupplied with sufficient stockpiles of above 100 million tonnes at ports for seven months in a row.

As of the end of August, iron ore inventories at China's ports reached 112.37 million tonnes, down 1.08 million tonnes or 0.95% MoM but rising by 39.38 million tonnes or 35.04% from the same time of last year.

CISA also forecast that the steel market will embrace the traditional consumption peak season in September and government measures to ensure steady growth will gradually go into force, but iron ore demand growth will be limited as steel production has perched high and it is unlikely to increase significantly.