A stalemate between China’s state iron ore buyer and BHP is reshaping supply flows into the world’s biggest steel market, while also helping stabilise prices during a softer demand period.
China Mineral Resources Group (CMRG) reportedly asked mills and traders in September to pause purchases of BHP’s Jimblebar Blend Fines while 2026 contract terms are being negotiated, according to Reuters.
The shift has tightened Pilbara blend fines (PBF) availability, as two sources told Reuters that portside inventories fell about 40 per cent to 6.5 million tonnes (Mt) by November 18, the lowest since August. While this drawdown is driven by supply disruptions, it has also provided unexpected price support at a time when weaker steel output might otherwise have pressured the market.
The response has boosted BHP’s equity performance, with the company’s share price rising nearly two per cent over the past 24 hours as investors assessed the impact of tightening supply and resilient ore prices.
Stocks of Jimblebar fines surged 156 per cent over the same period, one source said.
A BHP spokesperson told Reuters that “negotiations are ongoing” with China at this time.
Iron ore futures climbed to a two-week high on November 19, despite crude steel output falling to its lowest level since December 2023 after severe weather disrupted northern mills. Benchmark prices closed at 791.5 yuan ($111.23) per tonne, up three per cent month-on-month and 8.4 per cent since the start of the year.
This comes as BHP recently announced its billion dollar investment for Port Hedland. Western Australia Iron Ore (WAIO) asset president Tim Day said BHP’s plans include the delivery of a sixth car dumper at Nelson Point, which will support sustained production of more than 305Mt a year over the medium term.
“We’re investing more than $1 billion to deliver a sixth car dumper at Nelson Point,” Day said. “This will enable at least five car dumpers to run around 90 per cent of the time. It’ll generate some massive opportunities to create jobs and drive the economy here in Hedland too.”
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