China’s steel production fell by more than 10% from a year earlier in August as the industry reeled from low prices and a damaging slump in demand.

Last month was a particularly brutal period for the world’s biggest steel sector, with top supplier China Baowu Steel Group Corp. warning of increasingly bleak conditions. As mills fought deepening losses on every ton of steel they made, more of them chose to shut down furnaces.

Production of crude steel was down 10.4% from a year earlier to 77.9 million tons, according to the National Bureau of Statistics. That’s the weakest August for any year since 2017, and deepens this year’s overall decline. Total volumes for the first 8 months of the year were 3.3% lower at 691.4 million tons.

China’s steel demand is falling after more than two decades of growth powered by the nation’s rapid industrialization and urbanization. This year, and especially this summer, a continued slump in construction activity has worsened the situation.

Still, there have been modest signs of a pick-up so far in September, with some steel prices flicking higher and iron ore futures recovering from a slump below $90 a ton to post a weekly gain.

China’s struggling economy — from a battered property market to weak consumer confidence — is also weighing on oil demand, as highlighted repeatedly at a major industry gathering in Singapore in recent days.

Crude throughput, a gauge to show productivity in the world’s biggest oil refining market, fell 6.2% year-on-year to 59.07 million tons in August.

Source: Bloomberg