Iron ore majors slide after China flags steel export controls
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The news: ASX-listed iron ore miners were down in afternoon trade, tracking a fall in futures price on the Singapore exchange after China announced plans on Friday to introduce export licences for a range of steel products.
The numbers: At 2:52pm AEDT, shares in BHP had slipped almost 2.8% to $44.31. Fortescue (-0.9%) and Rio Tinto (-2.4%) had also fallen.
The wider materials sector had slipped 2.4% while iron ore futures on the Singapore exchange had fallen by about 0.8% to USD101.2 ($152.3) per tonne.
The context: China's Ministry of Commerce said exporters would need permission to export range of products from 1 January 2026. This includes steel used in construction, cars and consumer goods. China has been pushing its industry to move up the steel value chain.
China’s state-backed iron ore buyer also proposed measures to curb price control power of miners and traders on Friday.
China’s Mineral Resources Group (CMRG) has asked import terminal authorities to increase storage costs for iron ore, Bloomberg reported on Friday citing people familiar with the matter.
The proposed new rules would lower the period of free storage for companies from 60 days to 30 days before costs progressively rise. The fees would start at 0.1 yuan (2.1 cents) per tonne per day before capping out at 1 yuan after 180 days.
The CMRG was set up in 2022 to exert control over iron ore pricing and ramped up action earlier this year, including by banning the import of two types of iron ore from BHP. China is the world’s largest buyer of iron ore.
