The purchasing managers' index (PMI) tracking China's iron and steel sector advanced 8.4 percentage points month-on-month to 52.6% in April 2014, according to the China Federation of Logistics and Purchasing (CFLP).
The figure marks the first time since September 2013, that the PMI has returned to the growth area of above 50%.
April's new order index rose 11.7% month-on-month to 57.8% and market demand is said to be improving.
Analysts believe there will be an improvement in demand from downstream sectors and that steel prices have been boosted through May. However, steel prices are unlikely to rebound significantly as the domestic steel market in China is still facing high output and capital pressure.
Source: China Metals.