It’s Thursday, the 2^nd of October 2025. Today, China has put a temporary ban on BHP’s iron ore shipments after talks over the renewal of contracts broke down, in what is considered an act of brinkmanship by Beijing. Prime Minister Anthony Albanese said he was worried about the news and called for a quick resolution. Federal Treasurer Jim Chalmers was expected to call BHP boss Mike Henry over the issue. The refusal of shipments could result in cargoes worth millions of dollars remaining on board ships. BHP’s share price fell 2.5 per cent yesterday.

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News in brief

Property prices in suburbs popular with first home buyers will jump more than predicted by Treasury modelling after the rollout of the government’s new 5 per cent deposit scheme, according to economists and mortgage brokers.

Australia’s biggest car dealership, Eagers Automotive, will buy 65 per cent of North American network CanadaOne for $1.1 billion. Eagers is putting in $1 billion and major shareholder Nick Politis is tipping in another $128 million.

The Seven West-Southern Cross Media deal, announced on Tuesday, is already getting ugly with a big shareholder in Southern Cross trying to scupper the merger.

The US government has officially shut down after Republicans and Democrats failed to reach an agreement over funding bills. Hundreds of thousands of public service workers will be put on forced holiday, while those deemed essential will work with no pay. It directly affects 750,000 federal workers at a daily cost of US$400 million.

Donald Trump has given a long rambling speech to the US’s top military where he bashed his predecessor, Joe Biden, for the US military’s chaotic withdrawal and defeat in Afghanistan. He was followed by Defence Secretary Pete Hegseth who lectured the assembly on beards and physical fitness and criticised the military for not being much good.

Fear-o-meter

China halting BHP iron ore shipments might be a negotiating tactic, but it also demonstrates how much better Beijing is at dealing with global miners.

China Mineral Resources Group was established three years ago to improve that country’s ability to negotiate with miners such as BHP and Brazil’s Vale, the world’s biggest producer of iron ore.

CMRG acts as both a trader and strategic reserve. It has stockpiles at more than a dozen ports across China, releasing them when mills are struggling and buying aggressively when prices dip.

The group, backed by the Chinese Communist Party, is now the single most powerful buyer in the global market. That is who BHP, Vale, Rio Tinto and Fortescue Metals are dealing with.

China and the miners have an interdependent relationship, and notwithstanding the price of iron ore has remained above $US100 a tonne, it seems that China is slowly gaining the upper hand.

Fear & Greed Q+A today

On the outlook for stocks exposed to China, and her thoughts on BHP given the current stand-off with Beijing:

"I think the outlook for BHP is actually really good. Everyone's sitting there waiting for the share price to come back a bit more on this news flow and clearly it hasn't. It's only fallen a little bit, you know, after recently quite a good rally because BHP, even though 60 to 65 percent of the earnings come from the iron ore, which is directly related to China. But the other part of the business, 40 percent of the business is actually copper. And these days you can't get enough of copper. There's shortage here and there's a demand everywhere and then the global growth doing a bit better. So BHP actually looks very attractive."

 

*General information only. Seek advice before investing.

Greed-o-meter

The government shutdown in the US is the third under President Donald Trump - but it's happened under plenty of other Presidents too.

Source: CNN

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