Reuters quoted the government run People Daily said the decision of leading Chinese steel maker Baosteel to delay price increases for February was made in order to protect China national interest.
The newspaper said recent fluctuations in steel prices, unceasing media speculation and pressure from the public had also forced the company hand.
The state owned Baosteel defied market expectations on Thursday when it said that its scheduled CNY 200 to CNY 300 price rises for February would not go ahead as planned.
The official Xinhua news agency as well as steel industry consultancies like Mysteel and the China Iron and Steel Association-backed Custeel all said the company would raise February prices this week.
A spokesperson for the steel maker refused to comment on speculation that the company had been forced by the government to abort the planned hikes in order to take the air out of a raw material bubble and help China position itself for the latest round of iron ore price talks with foreign miners.
But traders said government intervention was always a possibility in order to curb soaring iron ore costs.
A Beijing-based steel trader said "Baosteel's decision not to raise prices isn't too much of a surprise to me, with iron ore prices rising so crazily since the beginning of the year."
She said "We have heard that the government has urged not just Baosteel but also Wuhan Iron and Steel and others to hold off for February so as not to add more heat to the iron ore market. But the trend is still one of steel price rises for this year."
Analysts said while the steel mill expected to be China principle negotiator with foreign miners during this year benchmark iron ore price talks might have been forced to take a hit on behalf of the industry as a whole it is unlikely to see its margins trimmed severely as a result of the decision.
Mr Su Aik Lim of Fitch Ratings in Beijing said "Cold rolled product lines at integrated steel mills like Baosteel are expected to remain profitable at current steel and raw material spot prices, thanks to strong demand from consumer appliances and auto sector thus the cost pressure on flat product prices for Baosteel is not intense now.”
Baosteel was roundly criticised in December last year for raising January prices and creating an inflationary spiral in the sector at a time when the industry was thought to be preparing for a new round of price negotiations with iron ore suppliers BHP Billiton, Rio Tinto and Vale.