Iron-ore has reached “unreasonable” levels that are hurting Chinese steel mills, according to China Mineral Resources Group, the state-backed firm trying to boost Beijing’s sway over prices.

Elevated costs are squeezing margins at steelmakers in the world’s top producer, Guo Bin, President of China Minerals, said at an event in Shanghai during the China International Import Expo. There needs to be more effort to “improve” pricing systems for raw materials, Guo said.

Iron ore futures in Singapore notched their highest close since March on Monday in a rally largely powered by surprisingly resilient Chinese steel output. The global iron ore market is in deficit and more price gains are coming, Goldman Sachs Group Inc. said in a note on Tuesday.

While it’s far from unusual for Chinese steel officials to bemoan rising iron-ore prices, the comments come at a sensitive time for miners like Rio Tinto or BHP Group. CMRG was established last year with the aim of centralising iron-ore imports and raising China’s heft against global mining giants.

Mining executives in the audience at the Shanghai event included Dino Otranto, CEO of Fortescue Metals Group, while Rio’s CEO Jakob Stausholm delivered a speech to the gathering by video.

“CMRG is quickly becoming a key player in the global iron ore industry and has an important role in increasing the high quality development of the steel industry,” Stausholm said. “Our partnership is going from strength to strength.”

At the same event, a senior official from the China Iron & Steel Association warned that high iron ore prices could stymie essential investment in areas including decarbonisation. The world’s steel industry requires massive spending in coming decades to shift away from reliance on coal-fired blast furnaces.

“The ecological basis for the sustainable development of the iron ore supply chain is increasingly fragile,” said Jiang Wei, vice chair of CISA.