Australian Broadcasting Corporation, October 13: "According to Chinese media reports, China Mineral Resources Group has signed an agreement with Australian mining giant BHP, and starting from the fourth quarter of this year, some spot transactions of BHP's iron ore exports to China will be settled in RMB rather than USD. However, the news has not been confirmed. The report states that this marks a breakthrough in the use of RMB for commodity settlements."

Comments: This event appears to be a change in currency settlement, but essentially, it reflects China's actual influence as the world's largest buyer of iron ore (accounting for 75% of global seaborne imports). Under pressure from China's suspension of USD procurement, BHP's acceptance of RMB settlement is a realistic choice, which verifies the market logic of "buyers leading transaction rules." Iron ore has long been the "ballast" of Sino-Australian trade, accounting for 38.2% of Australia's exports to China. This adjustment in settlement currency indicates that Sino-Australian cooperation is shifting from the old model of "Australian monopoly pricing and USD-dominated settlement" to a new form that better reflects mutual interests, providing a model for currency settlement reforms in other major commodities.

Iron ore is one of the commodities with the largest trade volume globally, and over 90% of it was previously settled in USD. China's annual import of more than 1 billion tons has continuously provided "blood" to the USD hegemony. This breakthrough can drive an increase in the proportion of RMB settlements - this ratio was only 5% in 2023, and had risen to 25% by 2025, and BHP's follow-up is expected to push the ratio beyond 40% by the end of 2026, which will also force other giants such as Vale and Rio Tinto to follow suit.

BHP can directly purchase Chinese electric vehicles and 5G equipment with the RMB it receives, or allocate RMB assets, forming a "resource-trade-finance" RMB circular loop. At the same time, China's RMB-denominated "North Iron Index" is联动 with the futures market, gradually replacing the Western-dominated pricing system, and promoting the global transition from "unipolar USD settlement" to "multiple currencies coexisting."

Original: www.toutiao.com/article/1845909307946387/

Statement: This article represents the views of the author.