Sweden IRL most certainly did not produce half the amount of steel that Germany produced, yet it does in the game.
While the actual in game numbers definitely are not realistic, they do help to mimic the real life situation. IIRC IRL a good deal of Germany's steel refineries pre-war were set up to process high grade(high iron concentration) Swedish ore. As the war went on this ore became less relavent due to German steel mills re-tooling(takes a while) to process the lower concentration French ore they gained access to.
How this all works in game though, I'm not sure since I'm still on HOI IV hiatus..