China extends ban on BHP iron ore to new product

China Mineral Resources Group (CMRG), a Chinese state-owned buyer, has issued an order to stop purchasing low-grade Jingbao iron ore from BHP Group. This was reported by Bloomberg, citing sources.

The ban applies to sea shipments and stocks in Chinese ports. The order to stop purchasing another type of raw material from BHP Group came amid ongoing contract negotiations with leading global mining companies. The parties have not commented on the situation.

In September this year, CMRG banned Chinese steelmakers from purchasing Jimblebar products from BHP. According to one source, the latest directive from the state buyer may be a countermeasure to the workaround used by some buyers, who mix Jimblebar with Jingbao to avoid inspections.

BHP previously reported minimal supply disruptions due to CMRG restrictions. However, traders expect this impact to become more apparent when the company begins selling shipments for January delivery.

CMRG continues to put pressure on BHP, the agency notes. While at the end of September, the Chinese trader asked buyers to stop all dollar-denominated sea purchases, now mills need permission to ship ore from the Australian company from ports.

There is also a possibility that the state buyer has targeted Jinbao instead of other BHP shipments, as the volume of lower-grade ore trading is very limited, so the ban will not cause significant market turmoil, Reuters writes, citing sources.

China Mineral Resources Group was established in 2022 to centralize iron ore procurement and obtain better terms from mining companies.

It should be noted that the price dispute between Australia’s BHP Group and China Mineral Resources Group could continue until early 2026. In October, it was reported that BHP had agreed with CMRG, as well as Chinese steel producers and traders, to switch to yuan settlements for 30% of its spot ore trade with China, which includes CFR-based prices at Chinese ports. The agreement was to take effect in the fourth quarter of 2025.