Million Tons of Iron Ore Unsold! Chinese Buyers Successively Distance Themselves from Two Major Traders

Multiple Chinese iron ore traders and steel mills have recently stopped transacting with Radiant World and Sapphire Minmetals Corp., making it difficult for the two companies to sell several batches of iron ore this week. Iron ore prices have fallen to their lowest level in over a year due to market concerns about the final destination of the cargo.

Bloomberg reported on Friday (7th), citing informed sources, that some Chinese buyers may still accept the cargo at heavily discounted prices, but uncertainty over transaction prospects has shaken market confidence. China accounts for approximately 60% of the global iron ore market, making buyer resistance particularly impactful for traders.

Guangxi Liuzhou Iron & Steel held an iron ore procurement tender on Monday. Although Radiant World submitted the most competitive bid, Liuzhou Steel canceled the tender without finalizing the deal. The following day, when the tender was relaunched, the company was barred from participating. Among the three state-owned raw material and logistics groups—Xiamen C&D, Xiamen Xiangyu, and Xiamen Jianfa—at least two have recently suspended iron ore transactions with one or both of the companies.

According to sources, a shipment originally scheduled to be sold by Sapphire Minmetals to a Xiamen-based trader was withdrawn by the buyer after pricing had been agreed upon, following the buyer’s decision to halt dealings. Global iron ore producers Vale and Rio Tinto are also reportedly removing Radiant World from their approved customer lists.

This week, Radiant World is attempting to sell six batches of iron ore totaling over 1 million tons, priced in U.S. dollars, to potential Chinese buyers. The company also holds inventory at Chinese ports available for sale in renminbi.

Market concerns stem from trade finance disputes involving the two companies. Bloomberg previously reported that several major commodity traders have ceased dealings with Radiant World over concerns it provided forged documents to banks related to iron ore transactions. Meanwhile, Vitol Group reportedly informed Jefferies Financial Group that certain invoices used to secure financing for Sapphire Minmetals were not genuine.

Although the two companies are not widely known outside the iron ore market, their combined annual revenue is approximately $18 billion. Glencore CEO Gary Nagle stated he views the two firms as a single group due to similar ownership and management structures, though Sapphire Minmetals emphasizes its independence. Both companies deny any wrongdoing.

Radiant World stated it does not comment on individual counterparties, specific transactions, or commercial positions, and emphasized that it always adheres to the highest commercial and legal standards. Rakesh Sethi, chairman of Sapphire Minmetals, declined to respond to related questions and called the notion of treating the two companies as a single group “completely wrong.”