Vale (VALE) cautioned that China cannot afford to strain ties with major iron ore suppliers given its heavy reliance on imported steelmaking materials, Bloomberg reported Friday.

Speaking after the company's Q3 results, Chief Financial Officer Marcelo Bacci warned that escalating tensions could disrupt supply chains, hurting all parties involved, according to the report.

China set up the state-owned China Mineral Resources Group in 2022 to centralize iron ore purchases and strengthen its bargaining power with major suppliers. The move has unsettled the market, particularly after CMRG reportedly pushed for a ban on BHP's dollar-denominated cargoes, raising concerns over potential disruptions, the news outlet reported.

Earlier this week, CMRG criticized existing iron ore pricing mechanisms as "irrational" and "unfair," arguing they favor miners and inflate prices, the report added.

Vale did not immediately respond to a request for comment from MT Newswires.

Shares of Vale rose 1.5% in recent trading.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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