China Mineral Resources Group has negotiated a long-term iron ore contract with BHP featuring yuan-linked pricing for Jimblebar fines. Analysts call it the first inclusion of China's market data in iron ore pricing benchmarks. US dollar dominance in the trade remains entrenched, however.
BHP announced in its latest operational review, released on Wednesday, that it had "concluded iron ore sales contract negotiations with the China Mineral Resources Group (CMRG)".
Industry insiders familiar with the matter confirmed to the South China Morning Post that CMRG negotiated yuan-linked pricing for BHP’s Jimblebar fines under the new long-term contract.
"The agreement marks the first time China’s own market trading data has been incorporated into the iron ore pricing formula, representing a paradigm shift in pricing benchmarks," said Xu Yidan, a ferrous metals analyst at GF Futures. "It changes the rules of the trade and strengthens China’s pricing influence in the iron ore market."
Analysts described the deal as a breakthrough in Beijing’s push for greater commodity pricing power amid growing US "geopolitical isolation". They stressed, however, that broader efforts to reshape the established order remain far from complete, with US dollar dominance in the trade still entrenched.