With China again leading the pack, demand for iron ore is skyrocketing, driving the production and prices of the key ingredient for steelmaking to ever higher levels. Indeed, ore production at Anglo-Australian mining producer Rio Tinto (NYSE:RTP) has continued to ramp up to 217 million global metric tons. That figure compares to a company forecast of 210-215 tons rendered just 3 months ago.

This comes as prices are moving steadily higher. Along with iron ore, which is near $110 a metric ton, coal (used to fuel certain steel mills), has climbed in excess of 30% just during the past year.

Other companies that have benefited from the general turnaround in the steel industry in general, and iron ore prices in particular, include Australia's BHP Billiton (NYSE:BHP) and Brazil's Vale (NYSE:VALE). At the same time, Arcelor Mittal (NYSE:MT) the Luxembourg-based leader among the world's steel producers and China's Baosteel, are both raising prices.

Looking ahead at the remainder of 2010, China is expected to turn out about 600 million metric tons of steel this year -- a figure that would constitute a record. It would also place the country at a level six times that of Japan, the world's second largest producer. Russia and the U.S. were in third and fourth place respectively in 2009. But lest you get the idea that China is on the verge of dumping steel throughout the world, it appears that most of the finished steel is poised to remain in the country.

But all is not completely rosy between Rio Tinto and China. You'll recall that in July, four Shanghai-based Rio employees, including one Australian citizen, were charged with bribery and espionage amid intense ore price negotiations between China and the company. Late last week, it was announced that the Chinese Public Security Bureau has turned the case over to the People's Procuratorate. The change indicates that the prosecutorial process will continue under Chinese law.

Given the improving market for steel and its raw materials, I'm eager to learn the results of such U.S. steelmakers as Nucor (NYSE:NUE) and U.S. Steel (NYSE:X) next week. In the meantime I would recommend that fools with a yuan for natural resources keep a very close eye on Motley Fool CAPS five-star rated Rio Tinto.

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does welcome your questions, comments, criticisms, or kibitzing. The Fool has an ironclad disclosure policy.