China Mineral Resources Group (CMRG) has instructed some domestic steel mills not to take delivery of certain portside iron ore products supplied by Australian miner Fortescue, marking the latest step in Beijing’s efforts to strengthen control over the country’s iron ore market, according to a report by Reuters based on sources close to the matter.
The sources said CMRG verbally informed some mills that, starting July 15, they should not take delivery of Super Special Fines and Fortune Fines, both lower-grade iron ore products supplied by Fortescue. Fortescue declined to comment on the matter. While the company’s shares remained broadly unchanged, shares of Australian mining peers BHP and Rio Tinto fell by more than one percent during trading.
Restrictions come amid ongoing negotiations
The move follows CMRG’s broader campaign to centralize iron ore procurement in China. Earlier this year, the state-owned buyer concluded negotiations with BHP after a months-long dispute, after which restrictions on several BHP products were lifted. Fortescue, which ships the majority of its iron ore to China, is still negotiating supply terms with CMRG. According to one trader, inventories of Fortescue’s Super Special Fines at major Chinese ports totaled 7.22 million mt as of June 30, representing nearly five percent of total portside iron ore inventories, based on calculations using Steelhome data.
The latest development follows reports that CMRG last month instructed some domestic steelmakers not to discuss Fortescue’s new Fortune Fines product, which is scheduled to begin shipments in July. CMRG was established in 2022 as part of China’s strategy to centralize iron ore purchasing and strengthen its negotiating position with major global mining companies.
