The country's second water pollution scare in a month sparked a run on bottled water.
The court ordered the cargo ship, Gloria, to be detained at the city of Nantong and set a bail of 20.6 million yuan ($3.3 million), Bu Xiaofang, a spokesman of the Zhenjiang municipal government, was quoted as saying late on Saturday.
Officials in Zhenjiang in Jiangsu province said phenol, an acid compound used to make nylon and detergents, was found in its water source last week. The pollution caused tap water in some parts of the city to emit a pungent smell, sending panicked residents to stockpile bottled water from supermarkets.
A cancer-causing cadmium discharge from a mining company polluted a long stretch of two rivers in southern China last month, prompting officials to warn some 3.7 million people of Liuzhou in the Guangxi region to avoid drinking water from the river, state media reported.
Pollution as well as food safety have come under the spotlight in China, where numerous crackdowns on the country's food sector have had little effect as it continues to be beset by poisoning and toxin scandals that have shaken consumer confidence.
The Yangtze, spanning 3,219 km west to east across China, is the country's longest river.