BHP(US:BHP) Sou Hu Cai Jing·2025-10-19 09:52Core Viewpoint - The article discusses the rapid shift in BHP's stance towards China, highlighting the impact of China's decision to halt purchases of dollar-denominated iron ore, leading BHP to agree to settle transactions in RMB, reflecting a significant change in the global commodity settlement landscape [4][10][39]. Group 1: BHP's Initial Stance and Response - Initially, BHP maintained a strong position, believing that China needed their iron ore and would not easily walk away from the relationship [10][12]. - However, after China’s directive to stop purchasing dollar-denominated iron ore, BHP's stock price began to decline sharply, indicating market reactions to the situation [6][10]. - Within a week, BHP was compelled to agree to China's terms, demonstrating a rapid loss of negotiating power [12][14]. Group 2: China's Strategic Positioning - China's ability to leverage its position stems from years of strategic planning, consolidating the purchasing power of over 600 steel companies through the establishment of the China Mineral Resources Group [18][22]. - The diversification of iron ore sources, including long-term agreements with Brazil's Vale, has strengthened China's negotiating position [18][26]. - The West Mangdu iron ore project, expected to produce significant quantities by 2025, further enhances China's supply chain resilience [24]. Group 3: Shift in Global Commodity Settlement - The agreement to use RMB for iron ore transactions marks a significant shift in the global commodity settlement landscape, traditionally dominated by the US dollar [31][35]. - Other major players, including Vale and Fortescue Metals Group, have also agreed to RMB settlements, indicating a broader trend away from dollar dependency [33][35]. - This change is expected to gradually reduce the dollar's dominance in global commodity trade, with RMB becoming a more reliable option for international transactions [35][39].