China bans all BHP iron ore cargoes amid pricing dispute: Bloomberg
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The news: China’s state-run iron ore buyer has ordered steelmakers and traders to suspend purchases of all new BHP cargoes, according to sources cited by Bloomberg, expanding an existing curb as talks about contract details stall.
The context: China Mineral Resources Group (CMRG) asked domestic asked to pause purchases of any dollar-denominated cargoes from the world’s largest mining company, sources told Bloomberg.
The decision came after several meetings between the parties since late last week which failed to achieve an agreement.
China is the largest consumer of iron ore globally, while BHP is one of three suppliers that supply the bulk of material to China’s steelmakers.
The restriction is the latest escalation from the halt on BHP’s Jimblebar blend fines earlier in September, and underscore’s Beijing’s objective of gaining influence over prices.
Beijing has tasked CMRG with shifting the balance of power in negotiations from miners such as BHP, Rio Tinto Group and Vale SA to China’s vast steel industry.
The numbers: BHP shares fell as much as 4.8% in London trading, the most since early April.
Iron ore futures traded at USD103.95 a tonne at 3:52pm in Singapore on Tuesday, up by 0.8%.
The source: Bloomberg
