BHP quickly softened towards China, insiders say it is very shrewd, and there must be a high-level advisor behind it!

On October 9, multiple media reports stated that BHP has accepted the requirement of Chinese customers to settle part of its iron ore trade in RMB, covering about 30% of its spot transactions with China, and will be officially implemented from the fourth quarter of 2025.

After the news was released, the stock price of this Australian mining giant fell by over 100 billion in just a few trading days. Within a few days, the global mining giant BHP experienced a dramatic shift from being firm to compromising.

As one of Australia's largest mining companies, nearly 70% of BHP's iron ore exports go to the Chinese market. The suspension of Chinese purchases has put it under great pressure. The RMB settlement scope has been precisely set at 30% of BHP's total iron ore exports to China, mainly covering port spot and delivered price transactions.

At the same time, China is accelerating its diversified layout of iron ore supply. Vale of Brazil has already activated RMB settlement and promised to increase the proportion of RMB settlement from the current 28% to more than 50%. The Simandou iron ore project in Guinea is also entering the final sprint stage, and according to the plan, it will start production by the end of 2025, with capacity climbing to 120 million tons in 2026, and exceeding 150 million tons in 2027—the number coincides perfectly with the gap left by BHP.

Analysts believe that after learning of the Chinese requirements, BHP knew it had to reach an agreement in the first round of negotiations, indicating that the company's senior management is still very professional. Because history has repeatedly shown that the conditions offered by China in the first round are always the best. This also indicates that there is a high-level advisor behind the company. It should be noted that BHP's attitude several decades ago was extremely arrogant.

Original article: www.toutiao.com/article/1845563024081928/

Statement: This article represents the views of the author.