The daily output of China's major steel companies in late October dropped 5.39 percent, or 86,600 metric tons, compared with the previous 10 days to 1.51 million tons, said a report issued on Wednesday by the China Iron and Steel Association.

Daily rolled steel output declined to 1.53 million tons, a 4.43 percent drop compared with the last cycle.

Xu Xiangchun, a senior analyst at industrial information provider Mysteel.com, said that the declining trend is hard to explain because from a market perspective, steel plants should grab the chance to increase production at a time when steel prices are rebounding and inventories are falling.