China’s CMRG sounds out steel mills on banned BHP ore stockpiles

China’s state-owned iron ore trader is checking on Jimblebar stockpiles held by some steel mills at Chinese ports, a sign that restrictions on the ore mined by BHP Group could be partially lifted.

China Mineral Resources Group Co. escalated a pricing dispute with the Australian miner by banning purchases of its Jimblebar Fines blend in September. China is the world’s biggest steelmaker and BHP one of its biggest suppliers. The ore has since stacked up at ports, incurring costs and disrupting steel production.

CMRG in recent days has surveyed mills about how much Jimblebar they’re holding and how much it’s costing in storage, according to people with knowledge of the situation, who declined to be named discussing a sensitive matter.

That’s opened up the possibility some buyers could be allowed to take delivery of the ore, the people said, although they cautioned they don’t foresee a complete end to the ban while the dispute with BHP continues. CMRG was set up in 2022 to consolidate China’s iron ore purchases and wrest pricing power away from foreign miners.

CMRG didn’t immediately respond to a request for comment. BHP declined to comment.

The state trader barred mills from using Jimblebar that had already landed in China and from purchasing new cargoes. The relatively low-quality blend is used as a supplementary feedstock and doesn’t account for a large share of overall supply, but the restrictions have nonetheless disrupted planning and logistics at steelmakers.

Earlier this month, a bulk carrier laden with Jimblebar unloaded in China after idling offshore for weeks, becoming a focal point for traders seeking to gauge whether the restricted material can ultimately be sold in the country. Several vessels carrying the blend remain offshore, awaiting clarity on whether they’ll be allowed to discharge, the people said.

(By Alfred Cang and Katharine Gemmell)