Mr Luo Bingsheng deputy chairman of China Iron and Steel Association said that he has not heard that Chinese steelmakers were sizing up a stake in BHP.

His comments followed a report recently in Sydney Morning Herald quoting an official connected with CISA as saying that Chinese steelmakers may combine to buy a significant stake in BHP Billiton Ltd.

The newspaper said Chinese companies including Baosteel, Wugang and Angang Steel may form an investment vehicle to buy the stake with funding possibly sourced through the China Development Bank, which helped Chinalco acquire a 9% stake in Rio Tinto earlier this year.

Mr Xu Lejiang board chairman of Baosteel and Huang Tianwen, president of Sinosteel have both denied any plan of BHP stake raid last month end.

According to Mr Liu Yuan an analyst from Mysteel, acquisition of overseas mineral assets or shares in the secondary market should be shunned since it would be seen as hostile takeover. Besides, usually this will trigger share price skyrocketing and push up acquisition cost.