China's biggest listed steelmaker Baosteel has suspended output at a 3 million metric tons-a-year plant, and 40 percent of the country's iron ore mines are standing idle as steel prices have crumpled on weak demand in the world's second-biggest economy, Reuters reported.

Baoshan Iron & Steel Co is one of the first major Chinese mills to publicly announce it is suspending production, but with China's economy cooling and banks curbing loans to an industry that racked up $400 billion of debt during recent boom years, more stoppages are expected.

In an attempt to kickstart the economy, Beijing this month approved some $150 billion worth of infrastructure projects, but there are doubts that demand in the world's largest steel producer will pick up soon.

"The government's infrastructure investment may only improve sentiment ... I don't expect a big lift in steel demand," Zhang Dianbo, assistant president of Baosteel, told reporters at an industry conference in Dalian.

At the same event, Liu Xiaoliang, executive deputy secretary general of the Metallurgical Mines Association of China said some 40 percent of China's iron ore mines have suspended operations as a slump in prices means they are losing money. Liu predicted iron ore prices would stay between $90-$110 in the next two years.

The world's largest iron ore producer, Brazil's Vale SA on Thursday forecast prices of $100-$120 a tonne and said it was pushing ahead with its own mine expansion projects.