Chinese steel industry officials have delivered a blunt warning to Australian iron ore miners against continuing to seek ��unreasonably high�� prices for their products.

The West Australian newspaper said a procession of Chinese industry representatives attending an iron and steel conference in Perth said recent record price hikes for iron ore were unsustainable and were putting steelmakers under intense pressure.

The officials also were quoted as warning that huge tonnages of ore had been stockpiled at Chinese ports and that softening internal steel demand and rising domestic iron ore production would soon lead to a "more balanced" Chinese market.

Their comments came as Rio Tinto announced that China's biggest steelmaker, Baosteel, had reluctantly agreed to a 71.5 percent price increase for iron ore this year �� mirroring recent price hikes obtained by other producers.

It also came as BHP Billiton, Australia��s biggest mining group, continued to hold out for an even bigger increase from its clients.

The West Australian quoted Liu Yongshun, president of Baosteel's mineral business unit, as saying iron ore suppliers and Chinese mills were jointly responsible for "maintaining long-term common prosperity."

"Some suppliers and trading houses, without regard to the normal rules, pushed the spot price unreasonably high in China," he was quoted as saying. "In the short term, it is harmful to the steel sector. In the long term it is harmful to short-sighted miners," he said

The newspaper said Liu noted that government efforts to put the brakes on China's economy, coupled with rocketing steel costs, was likely to significantly slow China's housing construction sector and other steel-hungry industries.

At the same time, the world��s top three iron ore miners are already expected to bring an extra 58 million tones of output capacity on-stream this year, while ore stockpiles at Chinese ports had nearly doubled to 37 million tons by the end of last year.

Source: Shenzhen Daily-Agencies