Fortescue said on Friday the actions of China’s state iron ore buyer were undermining the stable supply of iron ore to the country and it hoped for a swift return to normal market conditions after some of its shipments were affected.

China’s state iron ore buyer, China Mineral Resources Group (CMRG), is using increasingly hardball tactics against iron ore miners to tighten its grip on the $132 billion seaborne market and extract better terms for steel mills, which are suffering amid low margins and falling demand.

CMRG asked some domestic steel mills not to take delivery of certain portside iron ore products from Fortescue earlier this month, with the two parties locked in annual term contract negotiations, Reuters reported. BHP faced a similar ban earlier this year.

“The recent developments related to (CMRG) is the latest example of trade friction affecting the iron ore industry undermining the stable supply of iron ore to China. We hope to see a return to normal market conditions as soon as possible,” Agustín Pichot, Fortescue’s CEO for growth and energy, told an analyst call.

Australia’s iron ore producers have been under pressure from CMRG, as well as unions’ growing influence in the Pilbara iron ore region, with BHP facing its biggest strike action in decades next weekend at Port Hedland.

“We feel for what’s happening with BHP. The industry landscape has shifted dramatically,” Fortescue Metals CEO Dino Otranto told the call. “We’re certainly not immune to the same issues … (but) we are confident our culture will get us through it.”

Shares in Fortescue fell 3.3% against a 0.2% rise in the mining index. Iron ore prices in Singapore were flat at $98 a metric ton.

A delay to the ramp up of Fortescue’s magnetite operations, flagged back in May, is expected to cost the miner an after-tax non-cash impairment of $525 million that would be excluded from its 2026 underlying post-tax net profit.

“Iron Bridge continues to deliver below its 22mtpa nameplate,” Jefferies, which has an underperform rating on the stock, said in a note.

The company is exploring ways to lift port outload capacity, at Iron Bridge, currently seen as the key constraint to volume growth.

Fortescue’s overall iron ore shipments fell 5% for the June quarter to 52.7 million metric tons, but came in above a Visible Alpha consensus estimate of 52.48 million tons.

The world’s No. 4 iron ore miner expects to ship between 197 million tons to 207 million tons of the steel-making commodity in 2027, compared with 201.3 million tons shipped in 2026, banking on production improvements at its Iron Bridge magnetite mine and core hematite operations.

Fortescue flagged rising production costs. It managed to keep its Hematite C1 unit costs within its forecast at $18.74 per wet metric ton for the year. They rose 6% sequentially primarily due to higher diesel prices.

The company sees Hematite C1 unit cost for 2027 in the range of $20.50 to $21.75 per wet metric ton. Fortescue will report its annual results on August 24.

(By Jasmeen Ara Shaikh, Nichiket Sunil and Melanie Burton; Editing by Sriraj Kalluvila and Kate Mayberry)