China’s state-run buyer China Mineral Resources Group this week ordered mills and traders to halt purchases of all new BHP Group iron ore cargoes, freezing dollar-denominated deals and lifting Singapore iron ore futures 1.8% to $105.05 per ton.
BHP shares fell as much as 4.8% in London while iron ore futures jumped around 1.8% to $105.05 following the news.
The suspension means no new dollar-priced seaborne contracts with BHP can be signed, including cargoes that have already departed Australia. The only BHP tons currently tradable in China are yuan-priced shipments already landed at Chinese ports.
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CMRG’s move follows several meetings since late last week that failed to renew price contracts with BHP, with the dispute centered on discounting for BHP’s medium-grade ore, according to reports referenced in the notes.
The ban tightens earlier curbs on BHP’s Jimblebar blend fines, with mills instructed not to take delivery at Chinese ports nor to buy the blend on the yuan spot market. Some steelmakers have begun adjusting production parameters to accommodate substitute ores, signaling immediate operational impacts inside mills.
BHP said shipments out of Western Australia’s Port Hedland remain uninterrupted, a logistical fact that can coexist with China’s purchase freeze because the restriction applies to buyers in China, not to export clearances from Australia.
The decision underscores Beijing’s leverage campaign in iron ore. Analysts note moderating Chinese steel demand and looming new supply from Guinea’s Simandou as factors emboldening the stance.
CMRG was established three years ago to centralize buying power and now acts as trader and strategic reserve, holding stockpiles at more than a dozen ports, releasing when mills struggle and buying when prices dip. It now represents over half of China’s steel industry in negotiations with miners including Rio Tinto and Vale.
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