Chinese steelmakers' efforts to cut capacity will help the global steel industry out of the woods despite a surge in prices in the past two months, the Ministry of Commerce said on Thursday.

Shen Danyang, the ministry's spokesman, attributed the surge to a rise in the prices of iron ore in global markets. He said increased activity in the infrastructure sector is also boosting both domestic and global demands for steel products.

His comments came after the international media reported that global steel price on average had risen from $305 per metric ton earlier this year to $365 in April because China had cut between 150 million tons and 200 million tons of steel and iron production capacity to tackle the issue of overcapacity.