U.S. commodities giant Cargill is reportedly in talks with Australia's Macquarie Group regarding a potential sale of its metals trading business, according to a Reuters report citing people familiar with the matter.
The sources indicated that talks were ongoing, although a final agreement had not yet been reached and there was no guarantee the talks would lead to a deal. Neither Cargill nor Macquarie have publicly commented on the negotiations.
Cargill's metals division, based in Singapore, is a prominent player in the global trade of iron ore and steel. The company is reported to sell approximately 60-70 million tonnes of iron ore per year, as well as approximately 4 million tonnes of steel products.
Market conditions become increasingly challenging
The reported discussions come at a time when trading conditions in the steel sector are becoming increasingly challenging. The outlook for iron ore demand has weakened due to ongoing problems in China's real estate sector and slowing steel consumption growth. China remains the world's largest consumer of iron ore, making its economic performance a decisive factor in global market sentiment.
Market participants also highlighted the growing role of China Mineral Resources Group (CMRG) in centralized iron ore procurement. The organization's growing influence has helped reduce price volatility, reducing opportunities for traders who have traditionally benefited from market swings.
Cargill has already reduced exposure to some steel activities
The potential asset sales follow several years of restructuring of Cargill's steel division. The company stopped trading steel in China in 2024 as prolonged weakness in the country's construction and real estate sectors continued to weigh on steel demand.
The reported deal is also consistent with Cargill's broader corporate restructuring efforts and strategic priorities. In 2024, the company reorganized its operations, reducing its business structure from five segments to three and reaffirming its commitment to focusing on its core food and agriculture business
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