If China wants to temper the red-hot iron ore and steel sectors it's likely going to have to do more than just talk and tinker around the margins.

The iron ore price surged to a record $237.57 per tonne in New York on Wednesday as strong Chinese demand continued to outpace supply, but analysts were not convinced the price run had legs.

Champion Iron says it is capitalising on the global pivot to using premium-grade iron ore to make steel.

“High iron ore prices in early 2021 are unsustainable, but market fundamentals remain strong," says Moody’s senior VP Barbara Mattos.

Bloomberg reported earlier this week that smaller LNG buyers in China have been told to avoid taking Australian cargoes.

China’s massive physical purchases of iron ore have been the primary driver of the post-pandemic price rally.

China will monitor changes in overseas and domestic markets and effectively cope with a fast increase in commodity prices, the state council said.