(April 9): Iron ore slid to its lowest in a month after a report that BHP Group’s incoming chief executive officer had met with Chinese executives in Beijing this week, a possible sign that frosty relations between the mining giant and its main customer are thawing.
BHP and China’s state-backed iron ore buyer have been locked in a dispute over pricing for months. A resolution to that quarrel could see restrictions on BHP cargoes lifted, expanding supply of the key steelmaking material including ore currently tied up at ports.
Aluminum Corp of China, a major metals producer, said on Chinese social media that its executives met on Wednesday with a BHP delegation which included Brandon Craig, who formally takes the helm of the miner on July 1.
Iron ore futures in Singapore dropped as much as 3.5% to US$102.10 a tonne on Thursday, the lowest since March 10, before paring losses to trade at US$102.55 a tonne. The contract in Dalian fell as much as 2.4%.
Iron ore prices are particularly sensitive to news about BHP and its dispute with China Mineral Resources Group Co (CMRG). CMRG has imposed curbs on certain BHP products after the two sides failed to come to agreement over long-term contracts.
There hasn’t been any confirmation of a meeting between Craig and CMRG, and a BHP spokesperson declined to comment. Traders have nevertheless speculated that his presence in Beijing is a positive sign for the relationship and that a deal may have been reached.
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