China's steel overcapacity and rising stocks will continue to weigh on prices, the China Iron and Steel Association (Cisa) warned as prices fell in October for the third consecutive month.

Chinese steel prices slid 1.6 percent from the previous month and 7 percent from October last year but are expected to stabilize and rise this month. However, any gains will be capped by overcapacity, rising inventories and still-weak external demand,...