The process is verging on farce. The Chinese Iron and Steel Association, China's chief negotiator in setting prices for annual purchases of iron ore, is in the ludicrous position of trusting no one.

While an arm of the government is accusing Rio Tinto, the producers' representative, of six years of spying, resulting in more than $100bn of excessive charges for iron ore, Cisa can't very well sign off on an industry-wide benchmark settlement. Meanwhile, Cisa officials continue to maintain that spot markets are in the grip of speculators and thus do not reflect real demand.

Last week, China's iron ore import prices rose to a 10-month high of $110-$112 per tonne, nearly 80 per cent higher than the lows of mid-April and about 50 per cent higher than the price set in May with other Asian mills. Few are counting on prices softening soon. Wuhan Iron & Steel, China's third-biggest steelmaker, is reportedly planning to lift next month's rates for hot-rolled coil by more than a fifth.