The city of Foshan in southern China’s Guangdong province, which includes the important Lecong steel market, says its non-performing loan (NPL) ratio has begun to fall after spiking earlier in the year. It adds that steel trading volumes are essentially flat from 2013.

The city, in a move apparently aimed at calming fears over steel trader defaults this year, says its NPL ratio has fallen 0.14 percentage points from a peak in July. The ratio in Shende district, where Lecong is situated, fell 0.45 percentage points over the same period. It optimistically suggests that this means the dramatic rise in defaults this year is coming to an end, according to local media reports monitored by Kallanish.

The city’s NPL ratio surged to 2.6% at the end of July from 0.85% at the end of January, according to a recent report in the China Business Herald. The increase is more dramatic when looking at the total outstanding non-performing loans, which leapt 217% from the end of January to the end of September, when the total hit Yuan 19.21 billion ($3.14bn).

The Lecong steel market sold just over 24.4 million tonnes of steel with a value of Yuan 78.1 billion over the first 9 months of the year, suggesting trading volumes are essentially flat from last year, according to the Foshan government. Despite this Lecong Steel World says only two of its 1,000 lots are not being rented out to steel firms, according to local reports.