China's dependence on foreign iron ore likely will reach record levels, industry officials said, which could help global prices recover from a slump and intensify Beijing's efforts to diversify its sources of the ingredient in steel.

The forecast also projected that China would increase steel production despite government efforts to curb an industry widely seen as bloated and polluting. Beijing has pledged to curb steel-industry overcapacity as it restructures the economy. But the effort is politically difficult in places where facilities are significant employers.

China is the world's biggest buyer of iron ore, accounting for 63% of global imports last year. Its iron-ore imports are likely to rise 6% this year to a record 870 million metric tons, Li Xinchuang, executive deputy secretary-general with the state-backed China Iron and Steel Association, said at an industry conference Tuesday.

Steelmakers are buying ore even as inventories at port warehouses pile up to near-record levels and a slowdown weighs on the broader Chinese economy.

"A lot of mills are now importing ore in competition with each other," Mr. Li said. "It's like, if I see that you're bringing in ore, I have to bring in ore, as well."

Part of the appetite may derive from rising global supply, which is making prices more attractive. The world's top iron-ore producers are set to produce an additional 126 million tons, or 14%, this year, according to analysts.

Chinese demand could help stem the price slide. Iron-ore prices are down 21% from a year earlier to around $122 a ton on a fine-ore benchmark because of slower global growth and oversupply. They picked up slightly toward the end of last year because of Chinese purchases.

China's cost of producing its own ore remains high: 457 yuan ($75) a ton compared with $30 to $60 a ton for imported ore, said Pan Guocheng, chief executive of ore miner China Hanking Holdings Ltd. 3788.HK 0.00%

The disparity is driving China's dependence on foreign ore, which Mr. Pan forecast would rise to 949 million tons, or 77% of its total consumption in 2016 from 72% last year.

To reduce China's dependence on foreign suppliers, Beijing last month urged Chinese steelmakers to continue shopping for ore assets abroad.

More iron-ore imports are likely to come from China-owned projects in Africa, rather than from traditional suppliers in Brazil and Australia, Mr. Li said. The two countries—home to the world's largest global miners, Vale SA, VALE3.BR +0.03% Rio Tinto and BHP Billiton BLT.LN -0.60% —still supply a combined 70% of China's ore.

Africa accounts for just 8% of China's supply, most of it from South Africa. But Beijing has been building relations with at least 15 African nations, picking up small ore shipments last year from new suppliers such as Guinea-Bissau, Tanzania, Uganda, Zambia and Swaziland.

Tianjin Minerals & Equipment Group Corp., one of China's largest ore-trading companies, last year agreed to pay $990 million for a mine in Sierra Leone. China Minmetals Corp. has a six-year-old ore supply deal with Mauritania. And state-owned Aluminum Corp. of China 601600.SH +1.27% is developing the large Simandou iron-ore deposit with Rio Tinto in Guinea.

China still has a strategic need to break free of the market dominance held by BHP, Rio Tinto and Vale, Mr. Li said. "The speaking rights of global miners are still too strong," he said, referring to the companies' influence.

Beijing is trying to wield tighter control over a smaller steel industry to reduce price volatility and the industry's environmental footprint. But output of crude steel, most of which goes into China's construction, automotive and manufacturing sectors, is likely to reach a record 815 million metric tons, Mr. Li said.

"Overstimulus in the past has produced complications and a reform dilemma," Mr. Li said. "Overcapacity in the steel industry is larger than we imagined."

Still, the association said that the pace of growth will slow to 3% this year from 7.5% last year. Construction in smaller cities and towns will likely support growth in steel consumption, Mr. Li said.