China's state-owned iron ore buyer China Mineral Resources Group (CMRG) has asked some domestic traders to purchase iron ore cargoes through its own online trading platform as part of efforts to strengthen its influence over iron ore trading and pricing, according to a report by Reuters.
According to sources familiar with the matter, CMRG told around a dozen traders at a meeting on Thursday to use its platform for iron ore purchases. Established in 2022, CMRG aims to increase China's bargaining and pricing power in the global iron ore market, where the country is the largest consumer. One source stated that increasing transaction volumes on the CMRG platform would provide the state-owned buyer with greater visibility into iron ore prices.
Traders currently rely on miners and other platforms
At present, traders generally purchase iron ore directly from mining companies or through public trading platforms such as Corex and globalORE, while Chinese steelmakers are the main users of CMRG's platform for cargo procurement. However, CMRG reportedly did not provide details regarding when traders would be expected to begin using its platform.
Another source stated that a rapid shift could prove difficult since CMRG currently does not have sufficient cargo volumes available on its platform to meet all traders' requirements.
CMRG has also targeted negotiations with major miners
As SteelOrbis reported previously, CMRG recently instructed some domestic steel mills to suspend negotiations with Australian miner Rio Tinto over iron ore shipments from September. The state-owned iron ore buyer also restricted deliveries of Fortescue's lower-grade iron ore products and previously applied the same strategy to BHP before reaching an agreement with the miner.
These measures are aimed at strengthening CMRG's bargaining position during annual supply contract negotiations with the world's largest iron ore producers.
