US-based commodities giant Cargill is reportedly in discussions with Australia's Macquarie Group regarding a potential sale of its metals trading business, according to a Reuters report citing sources familiar with the matter.
Sources indicated that negotiations are ongoing, although no definitive agreement has been reached and there is no guarantee that the discussions will result in a transaction. Neither Cargill nor Macquarie has publicly commented on the reported talks.
Based in Singapore, Cargill’s metals division is a notable player in global iron ore and steel trading. The business reportedly trades approximately 60-70 million mt of iron ore annually, alongside around 4 million mt of steel products.
Market conditions become increasingly challenging
The reported discussions come at a time when trading conditions in the metals sector have become more difficult. Iron ore demand prospects have weakened due to ongoing challenges in China’s property sector and slower growth in steel consumption. China remains the world's largest iron ore consumer, making its economic performance a critical driver of global market sentiment.
Market participants have also highlighted the growing role of China Mineral Resources Group (CMRG) in centralized iron ore procurement. The organization’s increasing influence has contributed to lower price volatility, reducing opportunities for traders that traditionally benefit from market fluctuations.
Cargill has already reduced exposure to some steel activities
The potential divestment follows several years of restructuring within Cargill's metals operations. In 2024, the company exited physical steel trading activities in China as prolonged weakness in the country’s construction and real estate sectors continued to weigh on steel demand.
The reported transaction is also consistent with Cargill’s wider corporate restructuring efforts and strategic priorities. In 2024, the company reorganized its operations, reducing its business structure from five segments to three and reaffirming its commitment to focusing on its core food and agricultural businesses.