If you're buying Rio Tinto Ltd (ASX: RIO), BHP Group Ltd (ASX: BHP), or Fortescue Ltd (ASX: FMG) shares, then you'll know the importance of the prevailing iron ore price.
While the S&P/ASX 200 Index (ASX: XJO) mining giants are increasing their exposure to copper, iron ore will remain a core revenue earner for the foreseeable future.
And the iron ore price has continued to defy bearish analyst expectations of a retrace to US$90 or even US$80 per tonne.
Indeed, the industrial metal topped US$111 per tonne earlier this month and is currently trading north of US$109 per tonne.
Adding in the surging copper price, and we've seen two of three ASX 200 mining stocks smash the benchmark performance this year. (Fortescue shares have struggled this calendar year, in part due to concerns over the miner's ambitious green energy expenditures.)
In 2026, the ASX 200 is down 0.9%.
Over this same time:
- BHP shares are up 34.2%
- Fortescue shares are down 1.0%
- Rio Tinto shares are up 25.8%
Which brings us back to…
Image source: Getty Images
Why CMRG matters for BHP, Rio Tinto, and Fortescue shares
If you're not familiar with the acronym, CMRG stands for the China Mineral Resources Group.
Formed in 2022, the company – which represents the majority of China's steel mills – is backed by the Chinese government. The aim is to increase the nation's bargaining power over global iron ore prices by centralising purchasing negotiations.
As you may recall, earlier this year, BHP was locked in negotiations with CMRG for a number of months over potentially lower iron ore prices and increased use of renminbi in purchase contracts.
Those negotiations concluded last month.
And BHP, Rio Tinto, and Fortescue shares could suffer a hit to their future earnings if CMRG succeeds in gaining greater influence on global iron ore pricing.
That's according to Tim Day, BHP's Western Australian iron ore asset president, who warned that CMRG will continue to push for lower iron ore prices, thereby increasing the profitability of Chinese steel mills, in future negotiations.
Speaking at The Australian Financial Review Mining Summit in Perth, Day said:
We're through it now, which is the good part, but it will be on again next year … and it is getting more complex [and] will just continue from here.
What does that kind of mean for the Australian iron ore industry in particular? You will see over time that this will continue to play that way, and the power and size of China just have that impact.
