China lifts BHP iron ore bans after executive visit
China has lifted bans on supplies of a key steelmaking component from mining giant BHP Group, ending a months-long dispute following a visit by the miner’s top executives to its biggest customer, sources told Reuters.
On Tuesday, “state iron ore buyer China Mineral Resources Group (CMRG) notified some local steel producers that they are free to buy BHP’s seaborne cargoes more than six months later,” two sources with knowledge of the matter said, asking not to be named because the matter is sensitive.
CMRG has also told steelmakers that they will be able to receive BHP cargoes, which were previously subject to bans, from next week, sources said.
Ship tracking data from Kpler on Tuesday showed two ships carrying BHP’s Jimblebar powders were bound for China.
The chairman of China Baowu Steel Group met with CEO Mike Henry and new CEO Brandon Craig in Shanghai last week to discuss industry challenges and strategic cooperation, the chairman of China Baowu Steel Group said in a social media post on Friday.
According to the company’s social media post, they also met with Chinalco.
Craig will take over the world’s largest miner on July 1.
CMRG did not immediately respond to a request for comment.
BHP declined to comment.
Craig said on LinkedIn that the “real highlight” of his China trip was his time at Baowu, citing BHP’s “remarkable” growth thanks to iron ore, as well as their five-year partnership to reduce emissions in steel production.
“More importantly, the relationship goes deeper than the materials we source,” Craig said Tuesday.
Analysts said that while this contentious decision appeared to be an early victory for the new CEO, it was too early to tell whether it reflected any change in BHP strategy.
BHP shares rose as much as 3.8 percent.
CMRG, which was established in 2022 to centralize iron ore supplies and extract better conditions from miners, has gradually tightened restrictions on steel mills and traders buying BHP iron ore since last September, while negotiating a supply contract with BHP for 2026.
According to Reuters, CMRG banned the purchase of BHP’s Jimblebar fines last September; This was followed by miner Jinbao fines last November and Newman fines in March.
During the ban period, Chinese steel producers were not allowed to receive products unloaded at ports.
These restrictions limited the supply of iron ore in the spot market and caused steel producers’ prices to rise as China’s port inventories hit a record high in March.
Seaborne iron ore prices have mostly hovered above a key psychological level of US$100 per tonne since last August, resisting earlier expectations by some analysts that the supply glut would push them below US$90.
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