By Stephen Dziedzic

Copyright abc

The prime minister says he’s “concerned” by reports that China has banned iron ore imports from mining giant BHP in the midst of a pricing dispute, saying he wants the issue resolved “quickly”.

Bloomberg reported yesterday that China’s state iron ore buyer had ordered steelmakers to pause purchases of iron ore shipments from the company as they continue hardball negotiations with BHP over the price which should be paid for the commodity.

Chinese commodity analysis firm Mysteel contradicted that report later in the day, saying no such order had been issued by the China Mineral Resources Group (CMRG) — which Beijing created to consolidate purchasing power and help control iron ore prices.

But Anthony Albanese waded into the dispute when he was asked about the reports on Wednesday morning, referring to China’s past campaign of economic coercion against the Morrison government.

“I am concerned about that and what we want to make sure is that markets operate properly. Of course, we have seen those issues in the past,” he said.

“I want to see Australian iron ore to be able to be exported to China without hindrance. That is important, it makes a major contribution to China’s economy but also to Australia’s.”

The prime minister also suggested the ban might have been imposed by CMRG in an effort to create leverage during their negotiations with BHP.

“These measures are always disappointing. Let’s hope, certainly, that they are very much short-term,” he said.

“Sometimes when people are negotiating over price, sometimes these things will occur. I want to see this resolved quickly.”

Ban seen as ‘negotiating tactic’

BHP shares dropped slightly by 1.1 per cent to $42.05 at the open of trade on the ASX, in the wake of the reports and the prime minister’s comments.

A BHP spokesperson declined to comment on the negotiations. The ABC has approached CMRG and China’s Commerce Ministry for comment.

Earlier this year, BHP said it would cut spending on exploration as its annual profit dipped, partly because slowing Chinese demand has forced down iron ore prices.

Beijing is preparing to scale back steel production over 2025–26 in a bid to rein in overcapacity, according to an official paper seen by ABC in late August.

The reduction plan, drawn up by the industry and environment ministries, pledges strict controls on new projects and a gradual cut in output.

It comes as global oversupply pressures prices and provokes protectionist pushback from major trading partners.

Some market analysts have played down the impact of the apparent ban, arguing that China will have little choice but to continue BHP iron ore shipments.

“We view this ‘ban’ as more of a negotiating tactic, most likely an effort to secure lower long-term prices,” Kaan Peker at RBC Capital Markets said.

“On government instructions steel mills could try to offset BHP volumes via Fortescue, RIO, Vale, domestic ores, or stockpiles, but in aggregate it would be at higher cost and efficiency loss and this would be at the margin (competitors could currently only absorb a very small portion of BHP’s volumes).”

Treasurer Jim Chalmers also called the reports of the ban “concerning” and said he’d set up a conversation with BHP chief executive Mike Henry about the issue.

“Ultimately though, they are about the commercial arrangements between two companies and so in one respect, it’s a matter for the company to work through,” he said.

“I’ll have discussions with Mike Henry about that in due course when we can set that up.”

Mr Chalmers said the government would work through the issue “calmly and carefully” while advocating for Australia.