BHP Group has shipped iron-ore cargoes barred from sale in China to Malaysia and Vietnam, seeking alternative buyers as its stocks of Jimblebar pile up at Chinese ports amid a protracted contract dispute with Beijing.

China Mineral Resources Group (CMRG), set up in 2022 to centralise iron-ore purchasing and win better terms from miners, barred Chinese steel mills and traders from buying BHP's Jimblebar Blend Fines (JMBF), a type of medium-grade iron ore, last September during talks over a new contract that have still not concluded.

As talks drag on, a vessel, Lowlands Blue, laden with around 95 000 metric tons of BHP's JMBF, docked in Malaysia on January 14, the first such cargo discharged in Malaysia since shipping data tracker Kpler's records began in 2019.

Meanwhile, the Cape Yamabuki shipped roughly 75 000 tons of JMBF to Vietnam in December, according to Kpler data and two traders with knowledge of the matter. It was the first such cargo to Vietnam since at least 2024, Kpler data showed.

BHP DIVERSIFIES IRON-ORE BUYERS
While the shipments are small compared to BHP's annual production of more than 60-million tons of JMBF, the unusual trades demonstrate the Australian mining group's efforts to diversify its buyers to mitigate its China difficulties.

The world's No. 3 iron-ore supplier said on Tuesday it was still hammering out annual contract terms with the state iron ore buyer and "optimising distribution channels" in the meantime. It declined to comment on the reported shipments.

Stocks of BHP's Jimblebar fines at major Chinese ports were up 360% from late September to 8.1-million tons as of January 13, according to two separate traders.

Chinese steelmakers are not allowed to take delivery of JMBF cargoes already at ports, sources told Reuters.

Meanwhile, daily global exports of JMBF are down 74% from January 2025, according to a Reuters calculation based on Kpler data.

BHP has been offering more discounts for its iron ore including the Jimblebar fines to try to facilitate sales in China, several trade sources said.

For example, discounts of BHP's Newman fines, a type of medium-grade iron ore, for February shipments have widened to $4.73 a ton against the average of Argus and Mysteel's benchmark 61% indices, versus $2.48 for January shipments, according to two of the traders.

The deep discount prompted the Vietnamese steel mill order, according to a trader with knowledge of the deal.

All sources requested anonymity given the sensitivity of the matter.