China's iron ore production hit its highest in 11 months in September, official data showed on Monday, as a rebound in prices of the steelmaking raw material encouraged small privately owned miners to resume output.

Chinese iron ore output is being closely watched as higher iron ore and steel prices since early September have been linked to a drop in production by higher-cost, small miners.

But the increased output is unlikely to cut China's reliance on imports, given the low grades of domestic iron ore. Raw iron ore in China has about 15 percent iron content on average compared to around 60 percent for material found in Australia and Brazil.

China, the world's top iron ore buyer, imports about 60 percent of the globally traded steelmaking raw material.

September's output of 129.06 million tonnes of ore was an 11 percent rise from August and a 20 percent increase from a year ago, data from China's National Bureau of Statistics showed. It was the highest since October 2011 when iron ore output hit an all-time high of 132.4 million tonnes.

"The only reason for rising output I can think of is that some small miners and steel mills, which suspended or cut output, have resumed production," said Qiu Yuecheng, an analyst with Xiben New Line Co Ltd, a spot steel products trading platform in Shanghai.

Output of rebar, widely used in construction and mostly produced by smaller, privately-owned mills, hit a record high of 15.82 million tonnes in September, up 17 percent from a year ago, data showed.

A seasonal pick-up in demand on the back of increased construction activity has helped rebar prices rebound by more than 10 percent since early September. Spot iron ore prices surged more than 30 percent after hitting a near three-year low.

China's average daily crude steel output rose to 1.932 million tonnes in September, up 2 percent from 1.894 million tonnes in August. January-September output of iron ore jumped 17 percent to 968 million tonnes from a year earlier, while rebar output over the period rose 14 percent to 128.7 million tonnes.