Eight steel firms, including China Baowu Group, HBIS Group, Jiangsu Shagang Group and Ansteel Group, have formed a group to investigate whether "non-market factors" are causing a record surge in iron ore prices.

They also called on the government to maintain market stability.

The most-active September iron ore contract on the Dalian Commodity Exchange fell as much as 7.4% to 816 yuan  ($118.72) a tonne. It closed down 5.9% at 829.5 yuan, but posted a weekly gain of 1.4%.

After two consecutive days of declines, Dalian iron ore has moved further away from Wednesday's peak of 911.5 yuan a tonne, the highest since the benchmark's launch in 2013. That was more than double its end-2018 price of 438.5 yuan.

Benchmark spot iron ore with 62% fines for delivery to China <SH-CCN-IRNOR62> has risen 66% in value this year. It hit $126.50 a tonne on Wednesday, the highest since early 2014.

Executives of top Chinese steel mills met on June 27 to discuss strategies to cope with a rally in imported iron ore prices, according a document with the minutes from the meeting that was reviewed by Reuters.

They blamed the price surge on poorly designed methodologies by price reporting agencies publishing physical prices, speculators in the futures market and poor trading mechanisms in the spot market.

Apart from fundamental factors, there were talks about price manipulation being one of the reasons behind the price rally, but it has yet to be proven.

"The recent rally in prices has forced traders to reassess the outlook for the steelmaking raw material," analysts at ANZ said in a note. "While supply issues are still prevalent, the demand outlook remains mixed."

Concerns about tight supply had fuelled the rally in both iron ore spot prices and futures this year amid reduced exports from Australia and Brazil, analysts have said, but they saw shipments in June from the two top exporters rebounding.

Other steelmaking inputs traded mixed, with Dalian coking coal down 0.3% at 1,368 yuan a tonne. Coke futures  was 0.6% higher at 2,140 yuan.

Steel futures fell for a fourth day, with the most-active October rebar contract on the Shanghai Futures Exchange down 1.2% at 3,984 yuan a tonne.

The construction steel benchmark scaled a more than eight-year peak of 4,148 yuan a tonne on July 1 amid extended production restrictions in some of China's steel hubs as authorities seek to curb pollution.

Hot rolled coil, steel used in cars and home appliances, slipped 1.0% to 3,858 yuan a tonne. It touched an all-time high of 4,049 yuan on July 1.