BEIJING - Prices of steel products retreated in September despite falling output, underliningcontinued difficulties to digest supplies in the bloated sector, according to data from the NationalDevelopment and Reform Commission (NDRC).

Last month, the steel price index came in at 61.73, down 2.58 percentage points from theprevious month, the NDRC said in an online report.

In the first three quarters, crude steel production dropped 2.1 percent year on year to 608.94million tons, according to the NDRC.

Notably, exports jumped 27.2 percent year on year to 83.11 million tons, while imports went down11.6 percent to 9.73 million tons.

The Chinese government has been at pains to digest production gluts from an investment boomspawned by generous subsidies in the past few years that saw producers in "favored" sectors,including steel, expand rapidly with little regard to real market demand.

To gradually solve the problem, the government has banned new projects in steel, cement,electrolytic aluminum, flat glass and shipbuilding before 2017.