BEIJING - China's Baoshan Iron and Steel Corp, the country's biggest listed producer, said it remained positive about the direction of steel prices in 2011 even in the face of a weakening market.

"We are cautiously optimistic about steel product prices this year," said Chen Ying, the secretary of Baosteel's board of directors, during an online Q&A session for shareholders.

Chinese steel product prices have fallen around 6 percent since February as a result of lacklustre domestic demand, but the world was now in an age of high iron ore prices and high steel product prices, Chen said.

On Wednesday, Baosteel, China's biggest listed steelmaker, posted an 8.3 percent rise in profits in the fourth quarter, but said steel consumption growth was likely to slow this year.

Market conditions overall were expected to be weaker in 2011, said Baosteel General Manager Ma Guoqiang, speaking to the same online shareholder conference.

China's steel producers have been struggling in the first quarter of 2011 with demand uncertain and raw material prices still relatively high.

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The new quarterly pricing system for iron ore will put them under further pressure in the second quarter, when contract prices -- based on an average from December to February -- are set to reach an all-time high.

Ma said Baosteel was now buying ore entirely on a quarterly basis.

"Up to now we are still setting our procurement volumes on the basis of long-term contracts with the prices set according to the quarterly method."

Ma added it was still too early to say whether the Japanese earthquake would have an impact on the steel market.

"Japanese steel mills have reduced output and the earthquake at the same time has affected Japanese domestic and international steel demand ... but up to now it is hard to make a complete assessment of the impact," he said.