Australian Prime Minister Albanese said on Wednesday (October 1) that he was disappointed with China's ban on purchasing BHP iron ore and expressed concern about it.
According to reports from Bloomberg and Reuters, Albanese told the media in Sydney that the government wants to ensure the normal operation of the market and hopes that Australian iron ore can be exported to China without hindrance.
He pointed out that iron ore has made significant contributions to the Chinese economy, as well as to Australia.
Albanese added that he hopes this measure from China is only temporary, as similar issues may arise during price negotiations at times.
BHP Group is one of the world's largest mining companies and a major iron ore supplier to the Chinese market.
Iron ore is Australia's most valuable export product, but a report from the Australian government in June indicated that as global supply increases, iron ore export earnings may drop from AUD 116 billion (SGD 98.7 billion) in the previous fiscal year to AUD 105 billion by June next year.
China is the world's largest consumer of iron ore, accounting for approximately 75% of global seaborne iron ore imports. Three years ago, China established the China Mineral Resources Group with the aim of representing domestic steel companies in the unified procurement of iron ore, in order to gain more bargaining power as a single major buyer.
Bloomberg previously cited informed sources as saying that China Mineral Resources Group has requested domestic buyers to suspend the purchase of any BHP Billiton sea freight iron ore priced in US dollars.
According to informed sources, the two sides have held multiple talks since late last week, but have not achieved any results.
The report said that in early September, China Mineral Resources Group requested steel mills to suspend the purchase of BHP's Jimblebar Fines. The ban on iron ore marks an escalation of action and demonstrates the Chinese government's determination to increase its influence on prices.
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