And even as the output numbers rise, China is using less steel, Wang said.
Analysts said the steel industry's profits will continue to be small for a long time.
"The biggest iron ore suppliers have too much say," Xu said. "They will raise iron ore prices immediately when steel companies raise the price of their products."
Pressed by the rising price of iron ore, Baoshan Iron and Steel Co Ltd, or Baosteel, the country's largest listed steel maker, decided on Monday to raise the ex-factory price for February delivery of its main products.
The increases seen in the prices of upstream raw materials and of spot steel products have together contributed to the latest price increases, said Hu Yanping, steel analyst with custeel.com, a provider of data on metals.
Hu said she believes other steel mills will soon follow Baosteel's lead on prices.
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