Chinese state-owned iron ore trading arm China Mineral Resources Group (CMRG) is reported to have told Chinese steel mills and traders to stop purchasing cargoes of a second iron ore product from Australian miner BHP Group - specifically low-grade “Jinbao fines”, according to media reports. This move follows an earlier ban from September that targeted BHP’s “Jimblebar Blend Fines”.
The bans have come amid stalled negotiations between BHP and CMRG over the 2026 iron ore annual contract. The escalation is seen as China is leveraging its purchasing power in the face of weak steel demand.
In October, BHP Billiton agreed during negotiations with CMRG together with Chinese steelmakers and traders to switch to settlement in prices in Chinese currency (RMB) for 30 percent of its iron ore spot trading with China, with the agreement scheduled to take effect from the fourth quarter of 2025, as SteelOrbis previously reported.
Supply and price dynamics shift amid dispute
The halting of new Jinbao fines shipments includes directives for delivery from ports to be stopped within about three days, raising concerns over port congestion.
While Jimblebar fines trade volumes are significant for BHP (around 25% of its output), Jinbao fines volumes are much smaller, suggesting the ban is structured to exert pressure without triggering a large market disruption.
Strategic and diplomatic implications
The move is seen as commercially driven, with China seeking better contract terms rather than a punitive trade embargo.
For BHP, the dispute highlights rising risks in the export market to China and may influence its contract strategy with other major buyers globally.
From China’s perspective, the consolidation of iron ore purchasing through CMRG increases its leverage in negotiations.