BHP’s Jimblebar cargo sets sail for Malaysia amid China’s curbs

A cargo of an iron ore subject to curbs by China’s state buyer is now en route to Malaysia after failing to find a buyer in its traditional market.

The Ever Shine, carrying about 110,000 tons of BHP Group’s Jimblebar fines, is bound to discharge in Kuantan, Malaysia, by Feb. 3 after idling off China since Dec. 2, according to ship-tracking data from Kpler. The vessel offloaded Newman High Grade Fines in China — another BHP product, but not subject to the restrictions — around Jan. 10, but the Jimblebar cargo has struggled to secure a buyer.

The shipment would mark only the second time Jimblebar ore has been discharged in Malaysia since Kpler’s records began in 2019, the data showed. The Lowlands Blue unloaded just under 100,000 tons earlier this month.

A spokesperson from BHP declined to comment on commercial issues.

The voyage suggests traders are testing alternative markets after China Mineral Resources Group Co. imposed bans on BHP’s ores, including Jimblebar, as part of a broader effort to bolster the country’s negotiating leverage and rein in miners’ pricing power. China is the world’s largest iron ore consumer, while BHP is one of its biggest suppliers.

The product is currently trading at steep discounts to the benchmark iron ore index, potentially boosting its appeal to Southeast Asian steel mills. The shipment to Malaysia is notable, as BHP had previously sold Jimblebar fines almost exclusively to China.

The mining giant said last week that it is still negotiating annual contract terms with CMRG and will “optimize product placement and distribution channels” while talks continue. It acknowledged that the situation has weighed on its iron ore selling prices.

Meanwhile, weekly exports of Jimblebar fines from BHP have been zero over the last two weeks, the longest halt since September 2021, according to a separate data from Kpler.

(By Katharine Gemmell)