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The European steel industry has warned that an iron ore price rise of up to 90% will have a "huge impact" on the region's economic recovery.
The European Confederation of Iron and Steel Industries, (Eurofer), said it was outraged by reports that the major iron ore producers were seeking a rise of up to 90% in contract prices this year.
Eurofer said the industry was still reeling from the effects of the most serious financial and economic crisis since the 1930s.
"European governments should be aware of the implications for the wider economy if these price increases become reality," the industry body said.
"Increases of this magnitude will have a significant impact on steel prices and as such on the whole manufacturing and construction value chain and ultimately on the European consumer. This will reduce demand for many price-sensitive products and therefore slow economic recovery or even push economies back into recession."
Eurofer said the steel industry was increasingly concerned at the degree of concentration in the iron ore industry.
"It is striking in this respect that there is little variation in the level of price increases being talked about by the large producers which dominate the iron ore industry," the group said.
"The European steel industry has already indicated to the European competition authorities our concerns at the excessive pricing power now held by iron ore producers."
Speculation over the pricing talks has been in overdrive in the past week, with the latest reports suggesting that the global miners – BHP Billiton, Rio Tinto and Vale – have put talks with China on hold following a disagreement over price.
The halt in talks follows news this week that Brazil's Vale had proposed a price rise of more than 90% in talks with Japanese steelmakers.
Vale, the world's largest iron ore producer, was also said to have told its Chinese customers that it planned to drop the annual benchmark system in favour of quarterly agreements.
BHP has led the push to move away from the controversial benchmark system in favour of a quarterly pricing system aligned to market clearing prices.
The spot price is now around $138 a tonne, double last year's benchmark.
London-based ING forecast an 80% iron ore price rise in a report issued yesterday. ING said high spot prices set the level from which mining companies were likely to start negotiations.
"While there may be a speculative element to the current spot price, the spot market does reflect a price set by incremental demand," the analysts said.