The share price of Melbourne-based mining and metals corporation BHP Group Limited continues to see significant losses.
On Monday, the company’s stock slid to $50.10, down by 5.13% from the previous closing price of $52.81. BHP’s stock already shed 15.17% of its value over the past five trading days.
Restrictions on BHP’s Iron Ore Products
BHP is in the red zone as Beijing’s China Mineral Resources Group (CMRG) reportedly moved to expand restrictions on buying dollar-denominated seaborne iron ore cargoes from the Australian miner.
Citing people familiar with the matter, Reuters reports that CMRG told traders last week to buy fewer of BHP’s flagship products that were not subjected to restrictions imposed last year.
In September, CMRG ordered major steel mills and traders in the country to stop buying BHP’s Jimblebar fines, a type of iron ore. The state-owned company also reportedly informed two iron ore traders to seek permission first before purchasing any of BHP’s seaborne cargoes.
Following this development, inventories of iron ore from BHP piled up at Chinese ports. Some shipments that were supposed to be delivered to China were eventually redirected and sent to alternative markets.
Stand-off
The restrictions stem from a price dispute between BHP and CMRG. China is the largest iron ore consumer in the world and buys around three-quarters of the global seaborne iron ore. CMRG was established in 2022 to bolster the country’s bargaining power against global mining giants.
BHP is the largest mining company in the world by market capitalization.
“China wants to assert control over pricing after years of frustration at being the world’s biggest buyer, but still having little say over the price,” said Marina Zhang, researcher at the University of Technology Sydney’s Australia-China Relations Institute, according to Bloomberg “It’s also a signal to the rest of the world that China intends to play by new rules.”
Source: https://coinpaper.com/15286/bhp-share-price-plummets-as-china-expands-restrictions-on-mining-giant-s-iron-ore
