Iron Ore Drops as China Temporarily Eases Curbs

Iron ore futures fell toward CNY 800 per ton, pulling back from two-month highs after the state-backed China Mineral Resources Group said it would temporarily relax certain restrictions on BHP Group’s Jimblebar Fines following a sharp price rally. The decision is widely seen as a concession to steelmakers that have faced difficulties securing supply amid a prolonged dispute between CMRG and BHP. Prices had surged last week after CMRG expanded its ban on BHP iron ore for the second time in two weeks, informing mills that products such as Newman fines and lumps, along with Mining Area C fines, would be placed in the same restricted category as BHP’s Jimblebar blend. In response, Chinese mills rushed to transfer BHP ore from port inventories to their plants ahead of potential curbs. Over the past six months, China has gradually tightened limits on purchases of BHP iron ore while negotiating the terms of its 2026 supply contract.

Iron ore futures climbed above CNY 810 per ton and were poised to gain more than 5% for the week, as state-backed China Mineral Resources Group extended its ban on iron ore from BHP Group for the second time in two weeks amid a contract dispute. The CMRG also notified mills that products including Newman fines and lumps and Mining Area C fines, would be placed in the same restricted category as BHP’s Jimblebar blend. Chinese mills rushed to move BHP ore from port stockpiles to plants ahead of any curbs. Over the past six months, China has gradually tightened restrictions on purchases of BHP iron ore as it negotiated the terms of its 2026 contract. Last September, Jimblebar brand purchases were banned, followed by Jinbao products in November. CMRG was established in 2022 to centralize iron ore procurement and secure better terms from major mining companies.

Iron ore futures climbed above CNY 790 per ton, reaching near two-month highs as the intensifying conflict in the Middle East began disrupting shipments of the key steelmaking ingredient. At least three cargoes of iron ore mined by the UK’s Anglo American Plc and two from Brazil’s Vale SA have had their destinations changed, according to ship-tracking analytics data. Steelmakers in the Middle East rely heavily on imports of premium iron ore for pellets used in direct reduced iron production, a crucial precursor in steelmaking, with Oman and Bahrain serving as the region’s main pellet producers. The diverted cargoes were redirected to East Asia, including China, Malaysia, and Vietnam. Shipping flows through the Strait of Hormuz remain effectively shut due to Iranian attacks on vessels. The narrow waterway has also served as a key route for China’s steel exports to the Gulf, which has become China’s second-largest export market.