Aluminum Corp of China, the largest shareholder in Rio Tinto Group, said BHP Billiton Ltd’s dropped bid for Rio would benefit Chinese steelmakers.

Mr Lu Youqing VP of Chinalco said that “This is definitely good news for Chinese steelmakers. Under the current situation all companies need to focus on internal matters such as improving management and lower costs.”

Mr Lu added that “For the short term, no company will be immune from the pain caused by the financial turmoil and economic slowdown.”

Mr Ding Shouhu chief iron ore price negotiator at Baosteel Group Corp said that “If BHP successfully acquired Rio Tinto it would have had a negative impact on iron ore talks for next year.”

Chinalco has bought a 9% stake in Rio with Alcoa Inc for GBP 7.2 billion (USD 11 billion), a move analysts said was to thwart BHP from becoming the world’s dominant iron ore supplier to steelmakers. Mr Lu said that Chinalco has the approval of the Australian government and may seek an appropriate time to increase the stake in Rio to as much as 14.99%.