China appears to be softening its stance in a prolonged commercial dispute with BHP Group, as the country’s state-backed iron ore buyer signals a partial relaxation of earlier restrictions.
According to sources familiar with the matter, China Mineral Resources Group Co. (CMRG) has informed several domestic steel mills that they may resume bidding—starting Tuesday—for certain BHP iron ore cargoes priced in US dollars. While this marks a notable shift, mills have not yet been formally cleared to take physical delivery of BHP shipments from Chinese ports. However, further guidance is expected soon.
The development follows months of tension between BHP and CMRG over the terms of long-term iron ore supply agreements, which play a critical role in feeding China’s vast steel industry. The dispute began last September when CMRG imposed a ban on BHP’s Jimblebar fines, later expanding restrictions to include all dollar-denominated cargoes after rejecting BHP’s proposed contract terms. The current status of Jimblebar shipments remains uncertain.
The apparent easing coincides with a recent visit to China by Brandon Craig, BHP’s incoming chief executive, who held meetings with key stakeholders including China Baowu Steel Group Corp. and CMRG. Outgoing CEO Mike Henry also joined parts of the trip, underscoring the importance of the negotiations.
CMRG, established in 2022, was created to strengthen China’s bargaining position in iron ore pricing discussions with major global miners such as Rio Tinto Group and Vale SA. The organization has repeatedly criticized the current pricing system as “unfair” and “irrational,” arguing that it disproportionately favors the US dollar-based seaborne market over China’s domestic mechanisms.
Market reaction to the news was swift. Iron ore futures in Singapore—the global benchmark—extended their decline, falling 1.9% to $102.65 per ton by midday. Meanwhile, futures on China’s Dalian Commodity Exchange dropped 1.4% to 768 yuan per ton.
While the easing of restrictions suggests a potential thaw in relations, uncertainty remains as both sides continue to navigate complex commercial and strategic interests in the global iron ore market.