The Chinese state-owned China Mineral Resources Group (CMRG) has reportedly instructed some domestic steel mills to suspend negotiations with the Australian company Rio Tinto on iron ore supplies from September, Reuters reported, citing sources familiar with the situation. The move marks another reinforcement of CMRG's campaign to strengthen its position in negotiations over annual supply contracts with the world's largest iron ore producer.
As part of the annual contracting process, miners and steelworkers usually agree on shipment volumes, cargo distribution, and delivery schedules for the coming year. However, according to sources, CMRG has asked some plants not to enter into these agreements with Rio Tinto. Wood Mackenzie estimates that CMRG currently negotiates on behalf of more than half of China's annual iron ore imports.
The strategy is aimed at centralizing the purchase of iron ore in Китае
Market participants said the strategy was intended to encourage steel mills that still retain their negotiating rights to transfer those rights to CMRG, allowing the state-owned buyer to increase its purchases and strengthen its negotiating leverage with the world's largest mining companies.
After the reports were published, iron ore futures rose sharply. The most active contract on the Chinese Mercantile Exchange in Dalian rose 2.57% to 719 yuan per tonne ($106.54 per tonne), while the benchmark September contract on the Singapore Stock Exchange rose 2.15% to $96.45 per tonne.
The pressure is spreading to all major iron ore suppliers in Австралии
CMRG has already exerted similar pressure on other major iron ore producers in Australia, including BHP, Fortescue and private company Hancock Prospecting. More than half of Australia's iron ore is imported by China, making it the country's largest supplier of the main raw material for steel production.
Rio Tinto was previously thought to be relatively immune from such pressure, as its largest shareholder is the Chinese state-owned company Chinalco, which is also Rio's partner in the Simandou iron ore project in Guinea. However, Matthew Holtz, chief executive of Rio Tinto Iron Ore, recently admitted that the growing global supply of iron ore has deprived producers of leverage in negotiations. Noting that tension between buyers and sellers is inevitable, he said that the company remains focused on maintaining long-term partnerships and achieving mutually beneficial results.
Australian miners are seeking support from правительству
BHP had previously faced gradual restrictions on the purchase of some of its iron ore products in late 2025 and early 2026 while negotiations on an annual contract were underway.These restrictions were lifted after a visit to China by Brandon Craig, the new CEO. Meanwhile, on Fortescue said last week that CMRG's actions could undermine the stability of iron ore supplies to China.
Australia's largest mining companies and industrial organizations have sought the support of the Australian government to counter Beijing's increasingly coordinated procurement strategy, including discussions on establishing a single trading hub for Australian iron ore exports. However, some miners believe that Canberra is unlikely to take aggressive action as it continues efforts to restore diplomatic and trade relations with China following unofficial trade restrictions imposed on a number of Australian exports between 2020 and 2023.
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