LONDON, Oct 21 (Reuters) - Annualised global steel output fell in September to its lowest this year in top producer China as a gloomier economic growth outlook made buyers cautious and weakened demand, according to a Reuters calculation based on World Steel Association data.

Annualised global steel production however, rose in September as many steel mills boosted activity after the summer slowdown in the northern hemisphere.

In China, annualised steel production fell to 689.850 million tonnes in September from 691.757 million tonnes in August, the Worldsteel data showed on Friday -- the lowest daily production rate of 2011.

Macquarie said in a research note this week: "In feedback from some of our commodities team currently touring in China, highlights include reports from large steel mills of declining orders and that aggregate steel output should probably be reduced in the short term but individual producers are reluctant to respond for fear of losing market share."

"However, some improvement in order intake is expected before year end," it said.

Global steel production was running at an annualised rate of to 1.503 billion tonnes in September, slightly up from 1.467 billion tonnes in August this year.

Crude steel output in the European Union rose to 182.147 million tonnes in September from 150.003 million tonnes in August.

Some of the largest steel producers in Europe however, started to shut down blast furnaces and cut production this month and this is expected to pull down October production data.

In the CIS, annualised production rose to 113.028 million up from 111.207 million in August, while annualised output in North America fell to 120.998 million tonnes from 123.511 million tonnes in August.

STILL HEALTHY

Looking at production data year-on-year, growth in China and Asia was still much healthier than in Western economies.

Chinese production rose by 16.5 percent in September from the same month last year, while output in Asia grew by 12.9 percent in the same period.

Steel output in North America grew by 8.3 percent and in the EU by a meagre 4.4 percent in September year-on-year.

In its latest short-range outlook for apparent steel demand Worldsteel forecast demand growth would slow down in 2012 compared with 2011, especially in developed countries.

"Steel demand in developed countries is still below pre-crisis levels," Daniel Novegil, chairman of the Worldsteel economics committee, told a news conference last week.

"The crisis impacted unevenly different countries in the world and the recovery has also been uneven."

Steel production in Western Europe is likely to halve in the next 20 years as most basic grade steel production will migrate from Europe to lower-cost countries, the Chairman and CEO of Austrian steelmaker Voestalpine told Reuters last week.