BHP(US:BHP) Sou Hu Cai Jing·2025-11-06 02:09Core Viewpoint - The article discusses a significant shift in the global commodity settlement system, particularly in iron ore trading, driven by China's Minmetals Group's decision to halt all dollar-denominated transactions, which has profound implications for the industry and global financial dynamics [1][7][13]. Group 1: Iron Ore Market Dynamics - Since China's entry into the WTO in 2003, iron ore demand surged by 300%, while pricing mechanisms favored Australian miners, allowing them to profit significantly from a cost of $15 per ton to a selling price of $120 [3][4]. - Minmetals Group emerged in 2022 as a "super buyer," consolidating purchasing power from 128 steel companies and introducing a "centralized procurement + spot bidding" model, which includes a blockchain trading platform for transparency [4][10]. Group 2: Impact on Major Players - On September 30, 2024, Minmetals Group's suspension of dollar settlements directly impacted BHP, which derives 58% of its revenue from China, leading to a potential daily profit loss of $230 million [7][10]. - The introduction of a dual pricing mechanism by Minmetals, combining long-term and spot prices, disrupts the monopoly held by Platts Energy, allowing for cost reductions of $8 per ton for Chinese steelmakers [7][10]. Group 3: Currency Transition and Global Implications - Following Minmetals' actions, BHP's concession to accept renminbi for transactions marks a pivotal change in the global commodity settlement system, with immediate effects seen in the Singapore iron ore futures market [8][11]. - The shift to renminbi is expected to influence other commodities, with companies like Rio Tinto and Vale considering similar transitions, indicating a broader trend towards renminbi settlements in global trade [8][11]. Group 4: Financial Power Dynamics - The article highlights a power struggle between the U.S. and China, with the dollar's share in global reserves declining from 72% in 2000 to 58% in 2024, while the renminbi's share has surpassed 3.5% [10][11]. - Minmetals' success illustrates that market scale can create an "anti-monopoly force," leveraging blockchain technology to enhance trust in renminbi transactions [10][11]. Group 5: Future Considerations - The transition to renminbi settlements has prompted discussions among oil-producing nations about using renminbi for oil trade, indicating a potential shift in global trade practices [11][13]. - Concerns have been raised about the risks of over-reliance on domestic financial systems for Chinese steelmakers, prompting Minmetals to initiate the development of a global iron ore price index to ensure transparency [11][13].