China frees domestic mills to buy BHP iron ore products, sources say

China, the world's largest consumer of iron ore, has lifted bans on procurement of the key steelmaking ingredient from mining giant BHP Group, sources told Reuters on Tuesday, ending a months-long dispute.

On Tuesday, state iron ore buyer China Mineral Resources Group (CMRG) notified some domestic steel mills they were free to buy BHP's seaborne cargoes, said two sources with knowledge of the matter who sought anonymity, as the topic is sensitive.

CMRG did not immediately respond to a request for comment. BHP declined to comment.

The benchmark May iron ore on the Singapore Exchange lost 1.48 percent to stand at US$103.1 (HK$804.18) by 0547 GMT.

CMRG, set up in 2022 to centralise iron ore procurement and win better terms from miners, progressively tightened curbs on steel mills and traders buying BHP iron ore since last September while it negotiated with BHP on a supply contract for 2026.

Last September, CMRG banned purchases of BHP's Jimblebar fines, followed by the miner's Jinbao fines last November and Newman fines in March, Reuters has reported.

All three iron ore products are produced by BHP.

Chinese steelmakers were not allowed to take delivery of those products unloaded at ports during the period of the bans.

CMRG also told steelmakers they could take delivery from next week of BHP cargoes formerly subject to the bans, the sources added.

Those curbs had limited availability of iron ore in the spot market, pushing up prices even as China's portside stocks piled up to a record high last month.

Iron ore seaborne prices have mostly held above a key psychological level of US$100 a metric ton since last August, resisting earlier expectations of some analysts that a supply glut would take them below US$90.

Bloomberg News said earlier on Tuesday that China had eased curbs on some BHP cargoes.

The decision follows a visit to China last week by a team of BHP executives, who met officials of China Baowu Steel Group Corp, the world's biggest steelmaker, and aluminium giant Chinalco.

It comes after the appointment from July 1 of a new CEO for the company, Brandon Craig.

Reuters