Chinese steel consumption fell 1.5% in the first three quarters of 2023 compared with a year ago, according to data from the China Iron and Steel Association (CISA). Output in the same period increased 1.7%, separate data showed.

China has capped growth in its steel production for the last two years to curb carbon emissions, but not issued a similar mandate so far this year.

Asked if output this year would be kept at the same as last year's level, Shi Hongwei, CISA's deputy secetary general, told reporters that output will need to be adjusted.

"Steel demand will typically contract in winter; in this case, adjustment is needed in the supply side to achieve a balance," he said.

He declined to comment on how the adjustment would be made.

China's steel supply and demand in the fourth quarter is set to fall, CISA officials added, noting that output could be restricted due to environmental concerns.

Higher steel exports along with demand from the manufacturing sector have driven demand this year, Jiang Wei, the association's vice chairman told the briefing.

(Reporting by Amy Lv and Dominique Patton; Editing by Christopher Cushing and Edwina Gibbs)