BHP Group Ltd (ASX:BHP)

Hi Tony,

On the surface this looks like a routine commercial settlement, but there are a few layers here that matter for BHP (ASX: BHP) shareholders and the broader iron ore complex.

1. China is steadily gaining the upper hand on pricing.

This is the broader strategic shift playing out. China launched the COREX index via the Beijing Iron Ore Trading Centre last year as part of a clear push to influence pricing in a ~$120bn+ import market. Securing participation from a major global supplier — even at a partial weighting — is a meaningful foothold. It’s early days, but the trajectory is obvious: over time, China wants a bigger say in how its largest import is priced. This is a long game.

• However, importantly as a business BHP has transitioned away from its dependency on iron ore with coper already its main source of revenue.

2. The rebate is where the real economics sit.

The index changes grabs attention, but the 1.8% rebate on term cargoes is the more tangible concession. That’s a direct hit to realised pricing, and at BHP’s scale into China, it’s not trivial. It won’t derail earnings, but it does compress margins at the edges — and importantly, it creates a reference point for future negotiations.

3. This deal hints at who had the leverage.

Hancock moved first on COREX after regaining access to China, and now BHP has followed. The sequencing suggests Chinese buyers are in a stronger negotiating position than the majors would prefer to admit publicly. Rio will be paying close attention — this is unlikely to be a one-off.

Bottom line for BHP holders:

In the near term, this removes uncertainty and locks in access to the key end market, that’s clearly supportive. But the bigger theme is China gradually tightening its grip on pricing mechanisms. Australian producers aren’t resisting, they’re adapting. No immediate red flags, but the direction is worth tracking as COREX gains credibility and influence over time.

• We remain long and bullish towards BHP around $54 as it broadens it’s commodities mix.

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BHP Group Ltd (BHP)

LAST UPDATED 29/04/2026 11:27

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BHP Group Ltd (BHP)

LAST UPDATED 29/04/2026 11:27