BEIJING - Chinese crude steel production in September fell to its lowest point in seven months, shrinking 3.5 percent from August to 56.7 million tons, figures from the country's statistics bureau showed on Tuesday.

On a daily basis, the decline was less dramatic, with production at 1.89 million tons compared with 1.895 million tons in the previous month, according to Reuters calculations.

The figures are slightly lower than estimates made by the China Iron and Steel Association, which put September output at 58.13 million tons. CISA extrapolates total output figures from the production volumes of its 78 member companies.

Analysts have been expecting a decline in output in September and October, normally a peak demand period, with mills anxious about the state of the global economy as well as tighter domestic credit restrictions.

"The decline in output suggests that demand from downstream customers is shrinking," said Wang Dezhi, an analyst with China's Orient Futures.

"Looking at the overall state of (steel product) stockpiles and output, current market demand isn't very good and is also likely to be held back as temperatures gradually fall, especially in the north," he added.

Output in September was still 16.5 percent higher than the same period of last year, and daily production has remained around 1.9 million tons a day since February, far higher than the 1.7 million ton average of 2010.

Steel product output stood at 76.36 million tons in September, up 18.8 percent year on year and down slightly from 76.36 million tons in August.

According to figures from industry consultancy Mysteel, rebar stockpiles held by traders reached 6.12 million tons by the end of last week, up nearly 8 percent compared with four weeks ago.