China's steel industry association is calling for the broader use of a yuan-denominated iron ore price index as an alternative to existing dollar-based benchmarks. This move aims to improve pricing transparency within the global iron ore market, provide a cushion against market uncertainties, and enhance the voice of the Chinese market in international trade. The association expressed this view in a WeChat post, emphasizing the benefits for industry profits and stable operations.
This push aligns with Beijing's broader efforts to strengthen its pricing power in key raw materials and challenge the dominance of U.S. dollar-based Western benchmarks. Major miners are beginning to shift towards yuan-based pricing; for example, BHP Group agreed in mid-April 2026 to price 51% of its Jimblebar fines sales to China Mineral Resources Group (CMRG) using a yuan-denominated Beijing index, converting it to USD. This marks a significant shift as BHP, which generates over 60% of its $263 million FY2025 output revenue from China, is the first of the 'Big Four' miners to adopt such an index in a long-term contract.
The Beijing index, launched in September 2025 for port trades, is central to China's strategy. China, having imported over 80% of its iron ore and spent $123 billion in 2025, has considerable leverage. Other major miners like Rio Tinto and Fortescue have also reportedly agreed to switch from the Platts index for early 2026 shipments, under pressure from CMRG, which has grown into a significant entity with $2.9 billion (20 billion yuan) in registered capital. CMRG's influence was also evident in its directive to Chinese steel producers in September 2025 to stop using Jimblebar ore, a move targeting BHP during stalled negotiations.
