Updated

Updated · Bloomberg · Jun 26

Fortescue Iron Ore Cargoes to China Face July Delays as Deadlocked Talks Lift Prices

Updated

Updated · Bloomberg · Jun 26

Fortescue Iron Ore Cargoes to China Face July Delays as Deadlocked Talks Lift Prices

Q: Will a new iron ore mine in Guinea give China ultimate control over global prices?

No. The new Guinea mine, Simandou, will strengthen China’s hand in iron ore, but it is unlikely to give Beijing ultimate control over global prices. Simandou matters because it is one of the world’s biggest high-grade iron ore projects and could eventually add about 120 million tonnes a year. Chinese companies hold major stakes, and the ore gives China a valuable alternative to Australia and Brazil. That is already increasing China’s leverage in talks with suppliers, as shown by the current Fortescue delays and CMRG’s tougher bargaining over contracts and pricing benchmarks. But price control is broader than ownership of one mine. Iron ore prices are still shaped by global seaborne supply from Australia and Brazil, Chinese steel demand, port inventories, freight risks, and the wider economic cycle. China is the dominant buyer, but not the only force. Even with Simandou ramping up, analysts still expect average iron ore prices to ease in 2026 and 2027 because supply is growing faster than demand. What Simandou is more likely to do is reduce China’s dependence on the traditional suppliers and improve its bargaining power. It also supports China’s push to influence how ore is priced, including wider use of Chinese benchmarks such as COREX in contracts with miners like BHP. So the likely outcome is not absolute price control, but a market where China has more influence over supply security, contract terms and pricing mechanisms than before.

1 articles · Updated · Bloomberg · Jun 26

July-bound Fortescue iron ore cargoes for China are being held up, leaving some Chinese steelmakers unable to schedule deliveries next month.
Deadlocked negotiations between the Australian miner and China’s state-backed buyer have stalled the shipments, according to people familiar with the matter.
Friday buying interest for alternative ore cargoes picked up as mills moved to avoid potential shortages, pushing prices higher.
The disruption highlights how unresolved pricing or supply talks between major miners and Chinese buyers can quickly tighten spot availability.