Australia's move!

It really feels a bit dizzying!

Recently, the spot price of iron ore in Australia has dropped to about $80 per ton. However, Australian mining companies such as BHP still insist on an annual pricing mechanism during long-term agreements, demanding that the long-term agreement price for 2025 be raised to $109.5 per ton and refusing to settle in RMB.

If implemented, Chinese steel companies would need to pay over $20 billion more annually.

Currently, it is extremely difficult for domestic steel companies to directly settle in RMB with BHP for iron ore.

Recently, China Mineral Resources Group has officially notified domestic buyers that starting from September 30, 2025, it will suspend the purchase of all USD-denominated seaborne iron ore from BHP, including new contracts and cargo already en route, allowing only a small amount of spot cargo already arrived at the port to be delivered in RMB.

This means that if domestic steel companies want to continue purchasing iron ore from BHP, they need to use RMB settlement channels, but the current implementation path still faces obstacles.

In fact, Australian mining companies could maintain cooperation with China by lowering prices and accepting RMB settlement.

Currently, Brazilian mining companies such as Vale have already started using RMB settlement, and Australian mining companies such as Rio Tinto and FMG have also participated in RMB settlement trials. Only BHP continues to insist on USD pricing.

If BHP continues to maintain its high price and USD pricing stance, China may further turn to alternative sources such as Brazil and Guinea - after all, the Chinese market accounts for 70% of BHP's iron ore exports, and other markets cannot fill this gap.

At that time, the losses for Australian mining companies may not just be part of the market share, but also their core market position, and even potentially significantly impact Australia's GDP.

Combined with China Mineral Resources Group's decision to suspend procurement, it indicates that this is not just a single company's trade decision, but a key action by China to seize control of pricing and settlement in major commodities, and to restructure the global trade profit distribution pattern.

Original: www.toutiao.com/article/1845181882482760/

Statement: This article represents the views of the author.