But the November output was still up 40 percent compared with the same month last year, and the month-on-month dip is unlikely to allay government concerns that the sector is producing far more than the market needs.
Custeel, affiliated with the China Iron and Steel Association, said total Chinese output from January to November is expected to reach 521.84 million tonnes, up 13 percent from the year-ago period.
The Chinese steel sector has been bucking global trends all year, producing 48 percent of world output in the first 10 months, up from 37 percent in 2008.
The Ministry of Industry and Information Technology said on Wednesday that it would close all mills producing less than 1 million tonnes a year, and would also raise environmental standards in order to squeeze out excess capacity in the sector.
It also said it would close small and outdated mills with a total capacity of 16.91 million tonnes by the end of February 2010.
China's fragmented steel sector is estimated to have a total capacity of about 700 million tonnes, with about 130 million tonnes idle.
(Reporting by David Stanway, Editing by Ken Wills)
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