After more than six months of negotiations, BHP and China Mineral Resources Group (CMRG) have finally reached an agreement on their annual long-term iron ore contract. BHP announced the deal on April 22, 2026, in its quarterly production and sales report. Sources indicate that the two sides had already reached a preliminary agreement in mid-April, after which downstream steel mills began submitting their May demand volumes for BHP’s long-term contract to CMRG.
According to reports, the most significant change in this round of negotiations is the inclusion of RMB-denominated spot indices—including the iron ore port spot price index published by the Beijing Iron Ore Trading Center (hereinafter referred to as the “BIO Index”)—in the pricing mechanism for long-term contracts. This move overall enhances the reference weight of domestic index institutions. CMRG negotiates aggregated long-term contract volumes on behalf of Chinese steel mills, with pricing based on iron ore price indexes. As a result, BHP becomes the first of the “Big Four” iron ore miners (Vale, Rio Tinto, BHP, and Fortescue) to adopt the BIO Index in its long-term contracts.
Another major change is a larger price discount. According to sources, BHP has offered a 1.8% discount to major clients represented by CMRG in the negotiations, along with large-vessel discounts and freight rebates. The 1.8% discount, akin to a rebate, will be paid after the annual contract has been fully performed. This represents a significant increase compared to any price rebates offered in previous long-term contracts.
Negotiations between CMRG and BHP over the annual iron ore long-term contract intensified in September 2025. Despite multiple rounds of talks, the two sides were unable to reach an agreement, and the stalemate persisted until the recent deal.
