More fuel for the furnace. Japanese and Korean steelmakers on Monday agreed with Vale of Brazil to a 65 per cent increase in iron ore prices, paving the way for similar deals across the industry.

Steel mill operators were always going to have to swallow a hefty increase. Circumstances – including BHP Billiton’s tilt at Rio Tinto, which would combine two of the biggest suppliers of iron ore – meant miners held all the trump cards. Asian mills acquire the bulk of their iron ore from the Australian duo and Vale, and efforts to diversify have mostly foundered.