China-BHP Tensions Mount as State-run CMRG Moves to Block All BHP Iron Ore Shipments

TradingKey - Amid a breakdown in long-term contract negotiations, China has escalated its pressure on BHP Group, Australia’s largest company and the world’s biggest mining firm, imposing a sweeping restriction: halting all new purchases of BHP iron ore shipments.

According to Bloomberg, citing people familiar with the matter, China Mineral Resources Group (CMRG), a state-owned enterprise, has instructed major domestic steelmakers and traders this week to stop buying any seaborne iron ore cargoes priced in U.S. dollars from BHP.

The move comes less than two weeks after China urged steel firms to stop using BHP’s popular Jimblebar blend fines. The latest directive marks a significant escalation — a full-scale purchasing ban — seen as part of China’s broader effort to assert control over global iron ore pricing.

Sources said CMRG had held multiple talks with BHP late last week but failed to reach a satisfactory outcome, prompting the decision for a “comprehensive blockade.”

Established three years ago, CMRG’s core mission is to consolidate China’s fragmented iron ore buying power and shift negotiation dominance away from mining giants like BHP, Rio Tinto, and Vale SA — and into the hands of Chinese steel producers.

China is the world’s largest iron ore consumer, importing around 70% of global seaborne supply, while BHP is one of the top three suppliers to the country.

However, oversupply in key markets like China and India has weighed on BHP’s financials. In its FY2025 results (ended June 2025), BHP reported:

• 8% YoY decline in total revenue
• 26% drop in net profit — the lowest since FY2020 during the pandemic

While BHP previously stated that strong growth in India, resilient Chinese exports, and supportive policies could underpin future commodity demand, the current standoff threatens those assumptions.

In an era of rising trade protectionism, BHP’s growth outlook faces increasing constraints. Losing access to China — its crucial customer — would significantly strain operations and pricing power.

On Tuesday, September 30, BHP shares fell more than 3% in pre-market U.S. trading. Year-to-date, BHP is up 15%, slightly outperforming the S&P 500’s 13.25% gain.