IRON ore prices fell to their lowest in a month after reports emerged that BHP Group’s incoming CEO had visited Beijing, raising hopes that a prolonged dispute between the miner and its principal Chinese customer may be nearing resolution, Bloomberg News reported on Thursday.
Aluminium Corp. of China said on social media that its executives met on Wednesday with a BHP delegation that included Brandon Craig, who takes over as CEO on July 1. There has been no confirmation that Craig met separately with China Mineral Resources Group, the state-backed iron ore buyer at the centre of the row with BHP, and a company spokesperson declined to comment, said the newswire.
Iron ore futures in Singapore fell as much as 3.5% to $102.10 a ton, the weakest level since March 10, before recovering slightly to $102.55. The Dalian contract dropped as much as 2.4%.
BHP and CMRG have been deadlocked for months over long-term pricing terms, with CMRG imposing restrictions on certain BHP cargoes in response to the failure to reach agreement. A settlement could free up ore currently held at Chinese ports, increasing available supply of the steelmaking material and weighing on prices, said Bloomberg News.
Traders nonetheless read Craig’s presence in Beijing as an encouraging signal, speculating that some form of agreement may have been reached, the newswire said. Iron ore prices are particularly sensitive to developments in the BHP-CMRG standoff given the volumes involved and China’s dominance as the seaborne market’s largest buyer, it added.
