www.feizichem.com    Shijiazhuang FeiZi Chemical Technology Co., Ltd.

During China's National Day holiday, news in the trade sector caused fluctuations in the international market. China Mineral Resources Group recently issued a notice to domestic steel mills, requiring the suspension of purchases of US dollar-settled iron ore from Australia's BHP, including cargoes already shipped from Australia.
This decision quickly triggered a chain reaction in capital markets. BHP's share price fell by 7% in US trading, with Rio Tinto and FMG also dropping more than 4%. The Australian dollar depreciated by 0.8% against the US dollar on the same day. Within 24 hours of the announcement, Australian Prime Minister Anthony Albanese publicly responded, describing China's decision as "regrettable" and expressing hope for a swift return to normal trade, but did not receive an immediate response from China.
As a long-term primary supplier for Chinese steel enterprises, the suspension of purchases from BHP signals a potential significant shift in the China-Australia iron ore trade landscape. Superficially, this is an adjustment in the procurement of a bulk commodity, but in reality, it reflects a tug-of-war over iron ore pricing power between the two countries that has lasted for more than a decade.
It is understood that BHP proposed a 15% increase for the 2025 long-term contract price, to approximately $109.5 per ton, significantly higher than the current spot price of around $80 per ton. If this increase were accepted, China's steel industry would face an additional cost of about $20 billion annually. Currently, the average profit margin of Chinese steel enterprises has long lingered below 1%, with some companies, such as Chongqing Iron and Steel, already reporting losses, making it difficult to bear additional cost pressures.
Notably, China specifically emphasized halting receipts of "US dollar-denominated" cargoes. This statement has been interpreted by the market as an important signal of China's push towards de-dollarization in bulk commodity trade, aiming to increase the use of the Renminbi in international settlements.
On a deeper level, the change in settlement currency is not merely an adjustment in payment methods but a transformation of the entire trade system. As the Renminbi is gradually applied to bank financing, settlement systems, and exchange rate risk management, China's voice in global commodity trading is gaining new potential for enhancement.

Shijiazhuang FeiZi Chemical Technology Co., Ltd. was established in 2022. It is specializing in research, development, production and sale of pharmaceutical intermediates and fine chemicals. The factory is located in Shijiazhuang Circular Chemical Industry Park, covering an area of 50mu, with more then 60 employees. It’s research center is located in ZhiTongYaoGu of Shijiazhuang New and High-tech Zone, responsible for the development and high-end custom of new products.