BHP stands strong despite China talks

Even with China’s ongoing talks affecting BHP iron ore, exports from Port Hedland, the Pilbara’s main hub, have stayed strong.

China Mineral Resources Group (CMRG), the state-owned buyer created in 2022 to centralise iron ore purchases, has reportedly asked steel mills and traders to stop buying new cargoes of BHP’s low-grade Jinbao fines, according to two industry sources who spoke to Reuters. This follows a previous pause on Jimblebar blend fines as the parties negotiate BHP’s 2026 contract.

“CMRG told mills that they are not allowed to take delivery of Jinbao fines from ports in three days … so there might be a hustle and bustle at ports these few days,” one of the sources said. The second source added that Jinbao fines trade at very modest volumes and the market impact is expected to be limited.

Despite the dispute, Port Hedland exports remain strong. Exports reached 49.5 million tonnes last month, up 8 per cent from the same month last year, according to Pilbara Ports Authority data and Bloomberg calculations. So far this year, Australia has shipped about 476 million tonnes of iron ore from Port Hedland, roughly 1 per cent more than at the same point in 2024.

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 3 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 in 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 305 million tonnes (Mt) 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.”