Iron ore price war could last until 2026

There is a risk that the price dispute between mining giant BHP and China’s state-run iron ore buyer will continue for months, even into early 2026; because both sides are at an impasse.

So far, there has been minimal disruption to the world’s largest miner’s shipments to China, according to people familiar with the matter. This is largely because the company has already sold most of its iron ore allocation for November and December.

They said the company offered up to 50 cargoes in the days after China Mineral Resources Group ordered the suspension of purchases late last month. The shipments were offered to international traders and at least one Chinese company.

Any impact of CMRG’s effort to restrict BHP’s cargoes as part of the negotiations will likely only become evident once the company starts selling ore for January delivery, a process that will begin from next month. This window could provide BHP with room to maneuver in the talks, said the people, who asked not to be named as private commercial matters are discussed.

China is by far the world’s largest consumer of iron ore, while BHP is one of three major suppliers of the bulk of the material to the country’s steelmakers. Bloomberg News reported last week that CMRG had asked major domestic buyers, including steel mills and state-owned commercial enterprises, to suspend purchases of new seaborne cargo from BHP in US dollars.

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The move led to an earlier suspension of Jimblebar blend fines and signaled CMRG taking a tougher stance in its bid to gain more influence in the talks. The state-run company, formed three years ago to strengthen China’s position in talks with BHP, Rio Tinto and Brazil’s Vale, has been pushing to sign long-term contracts on behalf of the country’s main steel mills, sources said. This will help Beijing negotiate discounts and other preferential measures.

“China wants control over pricing after the disappointment of being the world’s biggest buyer, but still wants to have little say over price,” said Marina Zhang, a researcher at the University of Technology Sydney’s Institute of Australia-China Relations. “This is also a signal to the rest of the world that China plans to play by the new rules.”

Although the CMRG had no formal authority over the business operations of individual factories or traders, its recommendations became de facto binding due to the group’s political influence and strategic importance within the government hierarchy.