China, the world’s largest iron ore consumer, has reportedly instructed its steelmakers to halt purchases from Australian mining giant BHP, according to multiple media reports. The move is linked to a breakdown in supply contract negotiations between BHP and the state-run China Mineral Resources Group (CMRG), which was established in 2022 to centralize iron ore buying for the country’s steel industry.
The dispute centers on pricing. Bloomberg reported that earlier in September, Chinese mills were told to stop buying one specific BHP product, with the order later expanded to cover all shipments priced in USD.
According to Reuters, BHP is pushing for an annual pricing model tied to the Platts Iron Ore Index, while Chinese buyers prefer quarterly contracts linked more closely to spot prices, which are currently around USD 15 per ton lower.
Neither BHP nor Chinese authorities have confirmed the ban, and some analysts suggest it may be a negotiating tactic rather than a long-term restriction. Others remain skeptical of the reports, but concerns grew after Australian Prime Minister Anthony Albanese said he was aware of the issue, expressing hope for a quick resolution while acknowledging disputes are common in price talks.
