Chinese major ports are on high alert, strictly inspecting BHP iron ore, and refusing to accept it all!
It seems that China is determined to set a rule for Australia. Recently, domestic buyers have been required to stop purchasing any BHP sea freight goods priced in US dollars, and even goods already in transit are also within the scope of this restriction.
The attempt to settle iron ore in RMB has long been foreshadowed. In 2019, Chinese steel companies signed RMB-priced contracts with South Africa and Ukraine; in 2020, BHP completed cross-border transactions multiple times in RMB. In 2022, the first shipment of RMB-settled iron ore from BHP arrived at Rizhao Port in Shandong, completing a transaction worth nearly 100 million yuan, marking the first time an Australian mining company accepted RMB settlement in port spot trade.
Data reveals the weight of the Chinese market. In 2023, China's iron ore imports are expected to reach 370 million tons, accounting for more than 75% of global seaborne trade.
This global "de-dollarization" wave provides external momentum for RMB settlement. In March 2023, Brazil reached an agreement with China, no longer using the US dollar as an intermediary currency in trade settlements, directly using local currencies for transactions.
In the same month, Argentina announced that it would stop paying in US dollars for Chinese imports, instead using RMB. Countries in Southeast Asia such as Indonesia and Malaysia are also promoting local currency settlements, reducing their dependence on the US dollar.
High-grade iron ore from Brazil and Guinea is accelerating its supply to China, so BHP of Australia is facing not only a choice of settlement currency, but also a reshuffling of market share. If it insists on listening to the United States, Australia will lose the huge Chinese market. What remains to be seen is how Canberra will make its decision.
Original article: www.toutiao.com/article/1845021565474816/
Statement: This article represents the views of the author himself.