According to Mr Shen Wenrong chairman of Shagang Group Co, China’s talks with the world’s biggest iron ore miners are pointless as its steelmakers have to accept the higher terms Vale SA negotiated with Japan this week.

Mr Shen who heads China’s largest privately held steelmaker said that “We have no options. Iron ore prices have gone too far. We have to accept it, although we can’t afford it.”

Mr Shen said that “High prices will spur mine expansions. In the next three to five years, the oligopoly must be broken.”

China’s talks with the three suppliers are still on. Mr He Wenbo general manager of Baosteel Group Corp which is representing Chinese steelmakers in the talks said that “The negotiations are very difficult.”

(Sourced from Bloomberg)