China: CMRG asks select steelmakers to temporarily pause fresh purchase discussions for Rio Tinto’s iron ore

• Ask comes amid contract negotiations with Rio Tinto reaching critical stage
• Negotiations over iron ore supply terms reportedly enter a critical phase

China has reportedly instructed some steelmakers to temporarily pause discussions for fresh iron ore purchases from Australian miner Rio Tinto, with negotiations between the two sides reaching a critical stage.

As per reports dated 8 September, China Mineral Resources Group (CMRG), the country’s state-owned iron ore purchasing agency, had asked some steelmakers to hold off on discussing new purchases of Rio Tinto’s Pilbara Blend.

Details of the terms being negotiated, as well as the likely timeline for an agreement, remain unclear.

Market scenario

The latest instruction comes after CMRG reportedly issued a similar request in early August. At the time, some Chinese steelmakers were asked to stop negotiations with Rio Tinto for cargoes scheduled for September and later.

The earlier measure was mainly aimed at preventing the finalisation of new purchase arrangements, including shipment volumes, cargo specifications and delivery schedules. The latest request appears to put a temporary hold on fresh purchase discussions as negotiations continue.

Negotiation dynamics

CMRG was set up in 2022 to centralise China’s iron ore procurement and improve its negotiating position with international suppliers.

The agency has previously taken similar steps during negotiations with major miners, including BHP and Fortescue, by placing temporary restrictions on purchases or contract discussions.

Against this backdrop, the latest request involving Rio Tinto appears linked to ongoing discussions over iron ore pricing and supply conditions, rather than a move to restrict China’s overall iron ore imports. China remains a major market for Rio Tinto, contributing around 60% of the miner’s total revenue last year.

The relationship also extends beyond iron ore purchases. Chinese state-owned Chinalco is a major shareholder in Rio Tinto, while the miner is working with Chinese companies on the Simandou iron ore project in Guinea.

Mills are monitoring the negotiations for clarity on the eventual pricing and supply terms agreed between CMRG and Rio Tinto.