Apart from the warnings, China's Dalian Commodity Exchange has announced an increase in the transaction fee for iron ore futures contracts for February to May deliveries in an apparent move to cool down the rally.
The most-traded Dalian iron ore for May delivery fell as much as 8.6% to 761.50 yuan ($119.73) a tonne, its weakest since Jan. 27.
On the Singapore Exchange, the front-month March contract shed as much as 3.6% to $144.45 a tonne.
China's state planner, the National Development and Reform Commission (NDRC), on Friday said teams would be dispatched to the commodity exchange and major ports to look into iron ore inventories and trading in spot and futures markets.
It also warned information providers against fabricating prices amid a rapid rise over the past five weeks.
The 18% surge in Dalian iron ore prices last month followed predictions by analysts and traders about Chinese demand picking up when steel production restrictions are lifted after the Beijing Winter Olympics this month, as well as supported by economic stimulus measures.
Spot prices in China have rallied more than 20% this year, trading above $150 a tonne.
Warnings by major miners of labour shortages in Australia had added fuel to the price rally.
