China's steel output may rise 10 percent this year, aggravating the steel sector's oversupply problems and clouding the 2010 iron ore talks that are ready to kick off soon.

The country's steel lobby, the China Iron & Steel Association (CISA), said yesterday at a media briefing that steel output would rise by 50 million tons to 550 million tons this year.

"Oversupply problems have weighed heavily on steel prices and squeezed profit margins. This could lead to a more difficult situation in the fourth quarter and extend to the next year also," said Luo Bingsheng, CISA vice-chairman.