BHP Risks $2 Billion Hit From Dispute With CMRG, Goldman Says

BHP Group could face up to $2 billion hit from pricing pressures after China restricted its Jimblebar iron ore, as discounts widen and lump premiums collapse, according to Goldman Sachs Group Inc.

The restrictions could lead to about $1 billion a year in losses from incremental discounts on the company’s major iron ore fines products at spot prices, analysts led by Matt Greene wrote in a Jan. 27 report. A further $1 billion could be added as impact to revenue from discounts on lump products, with Newman Lump discounts driving an 80% fall in premiums paid on the product.