(Reuters) -Several cargoes of BHP iron ore were put up for sale in China on Thursday and at least one was sold to a local trader, potentially defusing concerns in Australia that Beijing had imposed a ban on iron ore sales from the world's biggest miner.

BHP sold a 170,000-metric-ton cargo to a Chinese trader on Thursday, the first day of trading after China's week-long national holiday, according to two traders with direct knowledge of the matter. The cargo was paid for in dollars, they said.

The same day, the Shanghai branch of China Mineral Resources Group (CMRG) - set up in 2022 to centralise iron ore purchasing and win better terms from miners - offered eight cargoes of BHP iron ore totaling 1.14 million tons to steelmakers, according to an offer sheet reviewed by Reuters.

AUSTRALIAN FEARS OF CHINESE BAN ON ITS IRON EXPORTS

Bloomberg reported last month that CMRG had told major steelmakers and traders to temporarily halt purchases of all new BHP cargoes, escalating an earlier pause on purchases of BHP's Jimblebar fines product, a type of iron ore, during a standoff in negotiations over new term contracts.

That news triggered fears in Canberra that China was preparing a ban on Australia's most profitable export, much as it did with coal and other commodities in 2020.

While CMRG told steelmakers last month during negotiations with BHP not to buy BHP's Jimblebar fines, purchases of other grades of iron ore can be made with permission from CMRG, two other sources with direct knowledge of the matter told Reuters.

TRADE IN BHP'S JIMBLEBAR FINES STILL FROZEN

None of the cargoes sold or offered on Thursday were Jimblebar fines, whose trade remains frozen according to all four sources.

Reuters could not determine when CMRG bought its cargoes from BHP or how many cargoes have been sold. 

CMRG did not respond to Reuters' emailed request for comment.

A BHP spokesperson said that BHP does not comment on commercial negotiations.

Jimblebar is a small but liquid product, with roughly 40 million tons a year produced, for which a limited shortage would be unlikely to trigger a rally in iron ore prices, the two trader sources said.

Rio Tinto's flagship Pilbara fines product could also act as a substitute, they added.

Last week, BHP CEO Mike Henry doused concerns about CMRG's decision in talks with Australian Treasurer Jim Chalmers, according to local media, saying the move was part of commercial negotiations.

The Treasurer's office did not respond to a request for comment.