China' tighten its grip on the $132 billion seaborne market         

Reuters -China's state iron ore buyer is using increasingly hardball tactics against mining giants such as BHP to tighten its grip on the $132 billion seaborne market and extract better terms for steel mills, just as a giant new source of supply is set to strengthen its hand.

China Mineral Resources Group CMRG  in November asked its steel mills and traders not to buy spot cargoes of a second BHP product, months after it blacklisted a first that drew concern from top supplier Australia's prime minister.The standoff over a deal for next year's supply marked an escalation because  CMRG had not previously banned multiple products from a single supplier, traders and analysts said.

That underscores how far the three-year-old buyer is willing to go to wrest better terms for China's steel industry.The deal under negotiation will account for the lion's share of production from BHP's mines in Australia's northwest, and around a fifth of China's needs.

Reuters' interviews with more than three dozen steel and mining executives, traders and analysts suggest CMRG has become more assertive, but found limited success. Some steelmakers have privately complained it has not delivered the better prices or contract terms they were seeking.

Still, CMRG 's tactics with BHP could set a precedent for deals with Rio Tinto, Fortescue and Brazil's Vale, said RBC analyst Kaan Peker in Sydney, as China looks to cut into the 80% margins the iron ore miners have historically enjoyed.

While refining its strategy ,CMRG  has enjoyed some wins and made some missteps. In a previously unreported move, the Chinese buyer extracted a $1 per metric ton freight-linked discount on certain large cargo ships from Rio last year, said three sources with knowledge of the matter.

 CMRG also became the only authorised Chinese seller of iron ore from billionaire Gina Rinehart’s Hancock Prospecting, a source familiar with the matter said, after a protracted standoff in which mills and traders said they were pressured not to buy Roy Hill MB fines on the spot market for more than a year.

But in executing the strategy ,CMRG  made life more difficult for its own steelmakers. It targeted a lower-grade product that was popular during times of painfully thin margins, forcing mills to pay more to source elsewhere.CMRG  then refined its approach to choose products that would exert maximum pressure on individual miners while limiting market disruption.

WSJ : Sedate Iron-Ore Market Might Be About to Stumble

 On the other hand Sedate Iron-Ore Market Might Be About to Stumble according to WSJ which  China's iron ore market in late 2025 faces a duality: record import volumes driven by steel mill restocking and government strategic buying via the CMRG, but also softening demand from a slowing property sector, pointing towards potential price weakness in 2026 as major new supply (like Simandou) looms, shifting market power away from traditional suppliers. The state-backed CMRG is actively influencing contract terms, seeking better pricing and local currency settlements (RMB), while new projects threaten to create a supply surplus, challenging miners' dominance

China is using (CMRG) to regain leverage

China is using the Chinese Mineral Resources Group (CMRG) to centralise iron ore buying and regain leverage after years of fragmented procurement and market volatility. Beijing aims to expand its coordination capacity and convert China’s dominant share of global demand into real market power, supported by new high-grade supply from Guinea’s Simandou mine. Whether this strategy can overcome past coordination failures or truly shift the balance of power in the global iron ore market remains an open question, but in this and other commodity markets, the actualisation of China’s decades-long attempts to overcome profound market vulnerabilities is becoming evident.

Establish of  Chinese Mineral Resources Group (CMRG)

It is noteworthy that the Chinese government established the 20 billion yuan (US$3 billion) Chinese Mineral Resources Group (CMRG) in 2022 to coordinate Chinese iron ore purchases in the international marketplace. Earlier in 2025, it made headlines after asking the iron ore buyers it represents to stop buying a particular iron ore blend from BHP, one of China’s top providers, until it agreed on various terms for the coming contracts. These included a commitment to renminbi-denominated settlements.

A more ambitious agenda to rebalance market power

China is certainly attempting to lower the price of a commodity on which it is heavily import dependent, arguing that profit margins for key iron ore exporters have been too high. Putting the financialisation genie back in the steel bottle will be difficult, partly because a new class of market participants in China, including traders, has benefited from these trends. But the country is pushing through a more ambitious agenda to rebalance market power in the realm of commodities.
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