Analysis: China’s Standoff With BHP Tests Global Iron Ore Pricing and Yuan’s Reach
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Talks over fourth-quarter iron ore pricing between Australian mining giant BHP Group Ltd. and China Mineral Resources Group Co. Ltd. (CMRG) reached an impasse, after the two sides failed to agree on a nearly $30-per-ton price gap and whether to settle in U.S. dollars or yuan — a standoff that underscores Beijing’s push to reshape global pricing power.
Talks between BHP and CMRG, which negotiates on behalf of dozens of Chinese steelmakers, fell apart in late September. The parties failed to agree on both price terms and the currency of settlement. In response, CMRG advised its member mills to suspend purchases of some BHP iron ore contracts priced in U.S. dollars.The impasse signals more than a pricing dispute. It’s a pivotal test of Beijing’s strategic shift toward collective bargaining, aiming to counterbalance the pricing power of the four leading miners — BHP, Rio Tinto Group, Vale SA, and Fortescue Metals Group Ltd. (FMG)
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- BHP and China Mineral Resources Group (CMRG) failed to agree on Q4 iron ore price and currency, with a $30/ton gap—BHP asking $109.25/ton vs. CMRG's $80/ton.
- China, importing 1.2 billion tons of iron ore (72% of global trade), is leveraging collective bargaining as demand drops and supply diversifies.
- Yuan settlements are rising amid China’s push to reduce dollar dependence, but global iron ore trade remains dollar-dominated.
- BHP Group Ltd.
- BHP Group Ltd. is an Australian mining giant involved in a pricing dispute over fourth-quarter iron ore with China Mineral Resources Group Co. Ltd. (CMRG). They are $30 per ton apart on price, with BHP seeking $109.25 per ton for Jimblebar fines. A currency dispute regarding settlement in U.S. dollars or yuan is also contributing to the impasse.
- China Mineral Resources Group Co. Ltd.
- China Mineral Resources Group Co. Ltd. (CMRG) is a Chinese entity that negotiates on behalf of dozens of Chinese steelmakers. Formed in 2022, its purpose is to consolidate procurement and unified negotiations for iron ore imports, aiming to rebalance the pricing power currently dominated by major global miners. CMRG is actively pushing for yuan-based settlements to reduce exchange rate risk and transaction costs for Chinese firms.
- Rio Tinto Group
- Rio Tinto Group is one of the four leading global miners whose pricing power Beijing aims to counterbalance through the China Mineral Resources Group (CMRG). While they, alongside FMG, have started accepting yuan for some shipments to China, they are listed among the major miners profiting significantly from high import prices and low production costs, contrasting with the financial strain on Chinese steelmills.
- Vale SA
- Vale SA is one of the four leading global iron ore miners, alongside BHP, Rio Tinto Group, and Fortescue Metals Group Ltd. Vale has increased its yuan transactions following high-level diplomatic visits in 2023 and 2025, aligning with China's push to internationalize its currency in iron ore trade.
- Fortescue Metals Group Ltd.
- Fortescue Metals Group Ltd. (FMG) is an Australian mining giant, listed as one of the four leading global iron ore miners. Along with Rio Tinto, it has started accepting yuan for some shipments to China, indicating a shift towards China's push for yuan internationalization in iron ore settlements.
- Baoshan Iron & Steel Co. Ltd.
- Baoshan Iron & Steel Co. Ltd. (Baosteel), a Chinese company, has been exploring yuan-based settlements for iron ore transactions since 2020. This initiative aligns with China's broader objective of internationalizing the yuan, aiming to reduce exchange rate risks and transaction costs for Chinese firms.
- 2020：
- China's annual crude steel production peaked at 1.1 billion tons.
- 2020：
- Chinese companies like Baoshan Iron & Steel began testing yuan-based settlements in iron ore trade.
- 2022：
- China Mineral Resources Group Co. Ltd. (CMRG) was formed.
- 2022-2024：
- Profits among China’s leading steelmakers plunged from 98.2 billion yuan ($13.8 billion) to 66.3 billion yuan.
- 2023：
- Vale increased yuan transactions after high-level diplomatic visits.
- 2024：
- China produced 53.3% of global crude steel, importing more than 1.2 billion tons of iron ore (about 72% of global trade).
- 2024：
- China's annual crude steel production dropped to 1 billion tons.
- First eight months of 2025：
- China's crude steel production declined 2.8% year-over-year.
- 2025：
- A hybrid 'annual-plus-quarterly' system was adopted for iron ore pricing between BHP and CMRG.
- 2025：
- Vale increased yuan transactions following high-level diplomatic visits.
- September 18, 2025：
- U.S. Federal Reserve rate cut occurred, leading to a weakening dollar.
- Late September 2025：
- Talks between BHP and CMRG over fourth-quarter iron ore pricing fell apart due to disagreements on price and currency.
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