China Mineral Resources Group Restricts Fubao Iron Ore Deliveries, Futures Briefly Break Below 100
Alina Collins
China's state minerals group ordered steelmakers to clear Fortescue's low-grade iron ore by July 15 and blacklist the product thereafter, briefly pushing futures to $101.20 a ton — but record-high port inventories leave the market skeptical of lasting price support.
What exactly did CMRG do?
CMRG verbally told Chinese steelmakers to stop taking delivery of Fortescue's Super Special Fines and Fortune Fines — two low-grade iron ore products — from July 15.
Holders of Super Special Fines must clear their stock before the deadline; the product will then be blacklisted.
The squeeze extends beyond port stocks — Bloomberg reports that some Fortescue cargo ships due in China next month have also been held back.
Why did futures spike then fade?
Singapore iron ore futures jumped 3.8% overnight to $101.20 a ton, breaking the $100 mark.
By Thursday morning the rally had thinned out — at 10:58 AM Singapore time the contract stood at $98.45, up just 0.9% from the prior close.
This means → the market's first instinct was "supply disruption," but once traders checked inventory data, the panic faded fast.
What do the inventory numbers say?
As of June 30, Super Special Fines stockpiles at major Chinese ports totaled 7.22 million tons — roughly 5% of total port iron ore inventory.
Total iron ore inventory at Chinese ports stands at 160 million tons, a record high for this time of year.
In plain terms = the restricted product is a sliver of a very full warehouse — no real shortage is looming.
What is the backstory of this dispute?
The restrictions are an escalation in a stalled price negotiation over long-term supply contracts between CMRG and Fortescue — Beijing is using trade restrictions as leverage.
Fortescue's China president left in June, just four months into the role, signaling how strained talks have become.
CMRG ran a similar standoff with BHP for months before striking a deal in April, after which Beijing lifted its restrictions. This reflects the same "restrict first, negotiate later" playbook now being applied to Fortescue.
Can this move reverse falling prices?
Guotou Futures analyst Han Jing said: "Any disruption to Fortescue cargoes may offer some support, but overall supply is ample and inventories are elevated — the impact is relatively limited."
Iron ore futures fell 6% through June, weighed down by persistent oversupply.
This means → the restrictions have created short-term volatility, but against the backdrop of record-high inventories, one policy lever is unlikely to reverse the broader downtrend.
Content is for reference only, not financial advice.