Rio Tinto Group and China Mineral Resources Group Co. (CMRG) have agreed a multiyear iron ore supply contract covering November 2024 to May 2028, according to sources familiar with the matter. The agreement adds to CMRG’s growing portfolio of deals with top global producers since its 2022 launch to consolidate Chinese steelmill purchases. Bloomberg reported in September that CMRG asked some mills to pause buying Rio Tinto’s Pilbara Blend as negotiations neared a critical juncture. China remains the world’s largest iron ore importer, sourcing most cargoes from Australia and Brazil to feed its vast steel sector. Benchmark prices have slipped about 15% this year, recently falling below $90 a ton in Singapore, with Thursday futures dipping as much as 1.7% to $89.45 a ton before recovering. Rio Tinto declined to comment on commercial talks, noting a long-standing relationship with Chinese customers. CMRG also did not respond to requests for comment.
Negotiations with CMRG have tested Rio Tinto’s Australian peers. BHP Group ended a months-long standoff with a one-year deal through June 2027 featuring greater yuan pricing. Fortescue Ltd. remains in talks after warning that sales restrictions could pressure full-year earnings. CMRG has additionally secured an accord with Kumba Iron Ore Ltd., the Anglo American Plc-linked producer, for supply from April 2024 until March 2027.
The deals underscore CMRG’s rising clout in global iron ore markets as Chinese buyers seek to strengthen bargaining power amid softer demand and falling prices.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing