China Steel Mills Allowed to Purchase BHP Iron Ore Cargoes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy BHP?
Source: seekingalpha
- Procurement Update: China Mineral Resources Group has informed several steel mills that they can resume bidding for certain BHP iron ore cargoes in US dollars starting Tuesday, indicating a potential easing of the months-long commercial dispute with BHP.
- Delivery Restrictions Remain: While steel mills are allowed to bid on BHP cargoes, they have not yet been explicitly permitted to take physical deliveries from Chinese ports, with a notice expected soon, which could impact their procurement strategies.
- Market Reaction Monitoring: This move by BHP may influence the supply-demand dynamics in the iron ore market, particularly against the backdrop of current global price fluctuations, as the procurement strategies of steel mills will directly affect their production costs and profit margins.
- Strategic Implications: The restoration of procurement permissions not only helps alleviate the raw material shortages faced by the steel industry but may also lay the groundwork for BHP's long-term development in the Chinese market, enhancing its competitiveness in the global iron ore sector.
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Analyst Views on BHP
Wall Street analysts forecast BHP stock price to fall
3 Analyst Rating
1 Buy
1 Hold
1 Sell
Hold
Current: 79.470
Low
49.50
Averages
56.50
High
68.00
Current: 79.470
Low
49.50
Averages
56.50
High
68.00
About BHP
BHP Group Limited is an Australia-based resources company. The Company is a producer of commodities, including iron ore, copper, nickel, potash and metallurgical (steelmaking) coal. It is focused on offering a range of resources, which provides copper for renewable energy; nickel for electric vehicles; potash for sustainable farming, and iron ore and metallurgical coal for the steel needed for global infrastructure and the energy transition. Its segments include Copper, Iron Ore, and Coal. Its Copper segment is engaged in mining of copper, silver, zinc, molybdenum, uranium, and gold. Its Iron Ore segment is engaged in mining of iron ore. Its Coal segment is engaged in mining of metallurgical coal and energy coal. The Company is also focused on operating Olympic Dam, Prominent Hill, and Carrapateena underground copper-gold mines in South Australia. Its operations are situated in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Capesize Index Soars: The Capesize index advanced approximately 8% for the ninth straight day, reaching 3,964, marking its highest level since mid-December, indicating robust demand for large cargo transport.
- Iron Ore Price Increase: Iron ore prices rose by over 2%, likely fueled by China's economy growing at a faster-than-expected 5% year-over-year in Q1, reflecting strong recovery momentum.
- Rising Costs Impact: Higher diesel prices due to the Middle East conflict are increasing production and transportation costs, with Galaxy Futures noting that unless the U.S.-Iran conflict escalates, the current pricing logic of supply and demand is unlikely to change.
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China Steel Mills Allowed to Purchase BHP Iron Ore Cargoes
- Procurement Update: China Mineral Resources Group has informed several steel mills that they can resume bidding for certain BHP iron ore cargoes in US dollars starting Tuesday, indicating a potential easing of the months-long commercial dispute with BHP.
- Delivery Restrictions Remain: While steel mills are allowed to bid on BHP cargoes, they have not yet been explicitly permitted to take physical deliveries from Chinese ports, with a notice expected soon, which could impact their procurement strategies.
- Market Reaction Monitoring: This move by BHP may influence the supply-demand dynamics in the iron ore market, particularly against the backdrop of current global price fluctuations, as the procurement strategies of steel mills will directly affect their production costs and profit margins.
- Strategic Implications: The restoration of procurement permissions not only helps alleviate the raw material shortages faced by the steel industry but may also lay the groundwork for BHP's long-term development in the Chinese market, enhancing its competitiveness in the global iron ore sector.
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- Index Surge: The Baltic Dry Index has rallied for the ninth consecutive day, increasing by 5.5% to 2,484, driven by surging demand and tightening vessel supply, particularly in the Capesize segment most affected by iron ore.
- Capesize Index Soars: The Capesize index advanced approximately 8% for the ninth straight day, reaching 3,964, marking its highest level since mid-December, indicating robust demand for large cargo transport.
- Iron Ore Price Increase: Iron ore prices rose by over 2%, likely fueled by China's economy growing at a faster-than-expected 5% year-over-year in Q1, reflecting strong recovery momentum.
- Rising Costs Impact: Higher diesel prices due to the Middle East conflict are increasing production and transportation costs, with Galaxy Futures noting that unless the U.S.-Iran conflict escalates, the current pricing logic of supply and demand is unlikely to change.
See More
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- Procurement Update: China Mineral Resources Group has informed several steel mills that they can resume bidding for certain BHP iron ore cargoes in US dollars starting Tuesday, indicating a potential easing of the months-long commercial dispute with BHP.
- Delivery Restrictions Remain: While steel mills are allowed to bid on BHP cargoes, they have not yet been explicitly permitted to take physical deliveries from Chinese ports, with a notice expected soon, which could impact their procurement strategies.
- Market Reaction Monitoring: This move by BHP may influence the supply-demand dynamics in the iron ore market, particularly against the backdrop of current global price fluctuations, as the procurement strategies of steel mills will directly affect their production costs and profit margins.
- Strategic Implications: The restoration of procurement permissions not only helps alleviate the raw material shortages faced by the steel industry but may also lay the groundwork for BHP's long-term development in the Chinese market, enhancing its competitiveness in the global iron ore sector.
See More
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- Coverage Resumption: BMO Capital Markets resumed coverage of Wheaton Precious Metals on Thursday, indicating a renewed market interest that could attract more investors to its stock performance.
- Rating Upgrade: The resumption of coverage comes with an upgrade in ratings, which may enhance market confidence in Wheaton, potentially driving its stock price up and reflecting analysts' optimistic outlook on the company's future performance.
- Market Reaction: Changes in analyst ratings typically influence investor decisions, and Wheaton's stock may experience positive effects, attracting more capital inflow and enhancing its market liquidity.
- Strategic Implications: The combination of BMO's coverage resumption and rating upgrade may prompt other financial institutions to reassess Wheaton's investment value, thereby enhancing its market position in the competitive precious metals sector.
See More
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- Iron Ore Futures Decline: Iron ore futures fell to a one-month low after Aluminum Corp. of China met with BHP's new CEO Brandon Craig, with prices dropping as much as 3.5% to $102.10/ton on Thursday, indicating market uncertainty regarding future supply and demand.
- High-Level Meeting Context: Chinalco Chairman Duan Xiangdong expressed hopes for further cooperation during the Wednesday meeting with Craig, despite ongoing pricing disputes with BHP's largest customer, China's Mineral Resources Group, which could impact future supply chain dynamics.
- Pricing Dispute Impact: The Mineral Resources Group has banned its steel mills from purchasing several BHP products, and a resolution could lift restrictions on BHP cargoes, potentially expanding the supply of key steelmaking materials.
- Market Reaction Analysis: According to Bloomberg, the decline in iron ore futures reflects market concerns over the outcome of negotiations between BHP and the Mineral Resources Group, with a resolution potentially improving supply conditions, while failure to reach an agreement could exacerbate price volatility.
See More
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- Executive Appointment: Lindian has appointed Derek Bideshi as CFO, effective July 6, bringing over 18 years of international experience in mining and resources, particularly in senior roles at Iluka Resources and BHP, which will provide robust financial support as the company advances its Kangankunde rare earths project in Malawi towards production.
- Enhanced Financing Capability: Bideshi's previous role as finance general manager at Iluka involved refinancing over $500 million in corporate debt and establishing funding structures for multi-jurisdictional operations, aligning closely with Lindian's strategic shift from development to production.
- Internal Promotion: Concurrently, Rajesh Agrawal has been promoted to general manager of finance, recognizing his significant contributions to building the company's financial systems; with over 30 years of experience in mining and multinational organizations, he will further strengthen the company's financial capabilities.
- Accelerated Project Progress: Lindian has secured A$100 million in funding to fast-track the expansion and downstream initiatives at the Kangankunde project, which is expected to produce high-grade monazite concentrate, supported by favorable project economics and infrastructure access, marking significant progress in the company's transition to production.
See More
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- Regulatory Breakthrough: Brazil Potash Corp. secured a 10-year water rights permit, enabling a shift to surface water that simplifies design and lowers expected capital costs, which is expected to positively impact the project's overall economics.
- Community Cooperation Agreement: The company formalized a cooperation agreement with the Mura Indigenous Council, ensuring alignment between project timelines and community development, thereby enhancing local support and reducing potential social risks.
- Financing and Construction Progress: At the start of 2026, the company made significant strides in financing, further advancing the construction of the Autazes Project, indicating its ongoing commitment to mineral development.
- Industry Trend Insights: Investors are invited to check out the complete report for detailed insights on the planned timeline for 2026, current industry trends, and what goes into Exec Edge Research’s valuation analysis.
See More
