China’s state-run China Mineral Resources Group (CMRG) has asked steel mills to suspend purchases of BHP Group’s Jimblebar blend fines, following a breakdown in long-term contract negotiations, according to sources familiar with the matter.
The move—also backed by the China Iron & Steel Association (CISA)—signals Beijing’s determination to wield greater influence over iron ore pricing, a market long dominated by the likes of BHP, Rio Tinto, and Vale.
Although CMRG and CISA lack formal authority to enforce decisions on mills, their directives carry significant weight given their political backing and direct ties to senior government officials.
Shifting Leverage in Iron Ore
Formed three years ago, CMRG was tasked with strengthening China’s bargaining power in the global iron ore trade. The country is the world’s largest buyer, consuming more than half of global seaborne supplies, and officials argue that such demand warrants better terms from producers.
Sources said some major state-owned mills have already canceled orders of Jimblebar shipments, while others are considering holding cargoes in bonded zones rather than clearing them through customs. Jimblebar, one of BHP’s key Pilbara mines in Western Australia, produces ore with about 60% iron content, commonly used in sintering blends for steelmaking.
Market Response
The trader has been pushing for discounted, long-term supply contracts directly with miners, but negotiations have seen little progress. In response to the latest developments, iron ore futures in Singapore rose as much as 1.3%, before settling at around $106.50 per ton on Friday. On China’s Dalian exchange, yuan-priced contracts climbed 0.9%.
At the same time, the steel association convened a high-level meeting in Beijing to review market conditions and advance work on a new domestic port-side index for imported iron ore. The goal: reduce reliance on global benchmarks like Platts and strengthen China’s control over pricing.
Industry Outlook
BHP declined to comment on its commercial arrangements. Meanwhile, CMRG’s expanding role highlights Beijing’s strategy to stabilize prices, reduce volatility, and tilt negotiating power in favor of its vast steel sector. The standoff underscores growing tensions between the world’s largest commodity suppliers and its largest buyer—tensions that could reshape the global iron ore market in the years ahead.
