China's top steel negotiator has formally rejected iron ore price cuts negotiated between Rio Tinto, the Australian mining giant, and Japanese and South Korean steel mills, signalling a showdown between Beijing and the miners.

“These prices do not reflect a mutually beneficial, win-win relationship for steelmakers and iron ore suppliers,” the China Iron and Steel Association said yesterday in a terse, three-point statement posted on its website. “Cisa therefore cannot accept these prices and will not follow them.”

Individual Chinese steelmakers signalled last week their dissatisfaction with price levels negotiated between Rio Tinto and leading steelmakers in Japan and South Korea, but Cisa's statement is the first formal rejection of the deal. This indicates that the association, which this year has replaced China's largest mill Baosteel to lead the price-setting talks for the first time, is taking a hard line.