China's steel industry will continue to face difficulties to cut costs and boost exports in the first quarter amid growing trade disputes, even though domestic demand is gradually increasing, a major economic policymaker said.

The National Development and Reform Commission published a forecast on the steel industry on Tuesday, saying the country's economic rebound in the fourth quarter has brought increasing demand. However, excessive supply will continue to be felt, it added.

"China's crude steel production capacity has reached 970 million metric tons," said Li Xinchuang, deputy secretary of the China Iron and Steel Association, at a conference in Beijing on Wednesday.