China’s state-run iron ore trader has told the country’s steel mills to temporarily stop using a popular product from BHP Group after talks on long-term contracts faltered, according to people familiar with the matter.

China Mineral Resources Group, created by Beijing to boost pricing power in the global iron ore trade, urged mills to suspend purchases of BHP’s Jimblebar blend fines from next week, the people said, asking not to be identified discussing private deliberations. The call was echoed by the China Iron and Steel Association, they added.

Jimblebar is one of BHP’s key mines in Western Australia, supplying ores with about 60 per cent iron content that are widely used in Chinese sintering blends. Bloomberg

While neither body has formal authority over any individual steel maker’s commercial operation, the recommendation has effectively become binding because of CMRG’s political clout and its direct reporting lines to top government officials, the people said.

The move underscores China’s push to gain greater bargaining power with the world’s top iron ore suppliers, arguing that its vast steel industry should secure better terms. Established three years ago, CMRG has been tasked with shifting leverage from major producers such as BHP, Rio Tinto Group and Vale SA towards the world’s largest iron ore buyer.

CMRG and CISA spokespeople did not respond to a request for comment. A BHP spokesperson said it could not comment on commercial arrangements.