Abstract: The cases of China's iron ore producing and importing in recent years were analyzed. As demand increasing, the price of iron ore was mounting steadily, the cutoff grade of domestic iron ore mine had decreased gradually, which caused the domestic crude ore production was increasing greatly while the concentrate production didn't increase correspondingly, the degree of China's iron ore external dependence was increasing year by year. To solve the problem, China's Iron & Steel Industry should speed up eliminating backward productivity, improve the utilization rate of iron ore during smelting process, increase domestic iron ore production capacity,meanwhile, increase the interest iron ore ratio in imported ore by oversea investment.

Key words: External dependence degree, Iron ore, Production capacity