Aug 6 (Reuters) – China’s state iron ore buyer has directed some steel mills to halt negotiations with Rio Tinto for shipments from September, two sources said, escalating pressure on the world’s top iron \u200core producer during annual supply talks. <\/p>\n
China Mineral Resources Group (CMRG) has increasingly used its buying power to wrest better \u200cterms for its steel makers by restricting purchases from big iron ore miners while term contracts are underway. <\/p>\n
In the run-up to the expiry of \u200bannual supply deals, miners typically discuss with customers their desired volumes and specific cargo and shipment dates for the next year, a trader said. CMRG has asked some mills not to settle those details, they said. <\/p>\n
CMRG is negotiating for more than half of China’s annual import volumes, according to commodity research group Wood Mackenzie’s estimates. <\/p>\n
The push to stall talks with Rio Tinto \u200cwas aimed at pressuring mills that have \u2060not given up negotiation rights to CMRG to do so, two traders and an analyst said, which would hand the state-run trader a larger procurement volume and boost its bargaining power. <\/p>\n
CMRG \u2060has already targeted Australia’s other top iron ore producers \u2014 BHP, Fortescue and privately held Hancock Prospecting, owned by Australia’s richest person, Gina Rinehart. <\/p>\n
Australia supplies more than half of China’s iron ore imports, making it by far its largest source of the steelmaking ingredient, \u200band the \u200bmaterial is Australia’s most valuable commodity export. <\/p>\n
CMRG did not immediately \u200breply to a request for comment. Rio Tinto \u200cdeclined to comment. <\/p>\n
UNDER PRESSURE <\/p>\n
BHP faced progressive purchasing bans on some products through late 2025 and early 2026 as its annual term contract negotiations dragged. Restrictions were lifted following a visit by its then incoming CEO Brandon Craig in April. <\/p>\n
Meanwhile, a top executive at Fortescue last week said that CMRG’s actions were undermining China’s stable iron ore supply. <\/p>\n
Rio Tinto had been seen as insulated from some of that pressure given its largest shareholder is China’s state-owned Chinalco, which also leads the \u200cconsortium partnering Rio Tinto in the Simandou iron ore project in \u200bGuinea. <\/p>\n
However, this week its chief executive of iron ore, Matthew Holcz, said \u200bnegotiating leverage has shifted away from iron ore producers \u200bas growing supply has balanced the market. <\/p>\n
Holcz said tension was always present between buyers and \u200csellers, but Rio was focused on long-term ties \u200band “win-win” opportunities. <\/p>\n
Australia’s major miners and their \u200blobbyists have asked Canberra for help in pushing back against Beijing’s efforts, including raising the prospect of a single selling desk for the country’s most valuable commodity export. <\/p>\n","protected":false},"excerpt":{"rendered":"Aug 6 (Reuters) – China’s state iron ore buyer has directed some steel mills to halt negotiations with…\n","protected":false},"author":2,"featured_media":108455,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20718],"tags":[255,44901,12991,44900],"class_list":["post-108454","post","type-post","status-publish","format-standard","has-post-thumbnail","category-rio-tinto","tag-china","tag-commodity-research","tag-rio-tinto","tag-steel-mills"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117135782912872485","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/108454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=108454"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/108454\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/108455"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=108454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=108454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=108454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}