China Mineral Resources Group (CMRG) notified some mills verbally that from July 15 they must not take delivery of portside cargoes of Fortescue's Super Special Fines and Fortune Fines, both of which are lower-grade iron ore products, five sources with knowledge of the matter said.
The move escalates CMRG's campaign to assert control over how iron ore enters the Chinese market, following a months-long standoff with BHP that ended in April.
Fortescue ships most of its iron ore to China and is still negotiating supply terms with CMRG.
All sources sought anonymity given the sensitivity of the matter.
CMRG did not immediately respond to requests for comment.
Stocks of Fortescue's Super Special Fines at some major Chinese ports stood at 7.22 million tonnes as of June 30, said a separate trader on condition of anonymity.
That represents nearly five per cent of total portside iron ore stocks, according to a Reuters calculation based on data from the consultancy Steelhome.
CMRG last month told some domestic steelmakers not to engage in discussions with Fortescue about a new iron ore product - Fortune Fines - scheduled for shipments from July.
Fortescue's China president Alvin Liu departed in June, just four months after taking the position, the company confirmed last week.
BHP said in mid-April it had concluded supply contract talks with CMRG, ending a months-long dispute, and Beijing then lifted bans on several of its products.
CMRG was established in 2022 as part of Beijing's efforts to centralise its iron ore procurement and win better terms from upstream mining giants.
