The world’s biggest iron ore miners are looking for novel ways of satisfying their customers and protecting market share in the $150 billion global industry.

From selling through a mobile app to portside sales, the likes of BHP Group, Rio Tinto Group and Vale SA are looking for an edge with buyers of the steelmaking raw material in China, the top customer. The need to retain their business is becoming ever more critical amid forecasts that the market is around its peak.

“For miners, Chinese import volumes are basically not going to grow the way they used to,” said Tomas Gutierrez, analyst at Kallanish Commodities Ltd. “Any increase in value for iron ore will come from either adding service to mills or from cutting out the traders.”

Rio and rivals — who have spent more than a decade pumping billions into expansions to keep pace with China’s fast-rising appetite for iron ore — are now preparing for an era of slower growth and an eventual high point in the nation’s steel output.

They are introducing a range of initiatives to retain existing sales and add new customers — from Rio’s development of a mobile app, to portside sales, and selling directly from China’s ports in yuan instead of shipping cargoes from Australia or Brazil that are sold in dollars.

New Strategies

“Our China portside customers will be able to order via a mobile app,” Rio’s Chief Commercial Officer Simon Trott told an investor seminar in October. “You can order a few tons of ore, in the same way you’d place an order on Amazon.”

Rio has started portside sales, while BHP also has been testing “spot sales during transport to China as well as sales in smaller quantities with shorter lead times from bonded stockpiles in China,” Rod Dukino, vice president for sales and marketing iron ore, said at a conference in September.

Selling at ports allows miners to blend different types of ore, and means “more money in the miners’ pockets,” according to UBS Group AG managing director and global head of mining, Glyn Lawcock. “We have seen over the last few years increasing sales to traders and now the miners are clawing back some of that lost margin essentially.”

In particular, the use of the Chinese yuan is a breakthrough for an industry dominated by the dollar. For mills, this eliminates currency risks. For miners, this broadens their customer base and again cuts out the traders, said Lawcock.

In June, Fortescue Metals Group Ltd. set up a sales office in China, offering direct supply of smaller volumes in the yuan. “This represents a new sales channel for Fortescue to complement our existing seaborne trade,” Chief Executive Elizabeth Gaines said in an email.

BHP sees “huge potential in the digitization of our post-trade processes across our portfolio, both for customers and suppliers alike, through increased visibility and traceability of goods” Dukino said in an email.

Large and medium-sized steel mills in China generally support the miners’ new sales strategies, according to a survey by Bloomberg of five executives at mills and industry groups.

“As producers get closer to a diverse range of end customers, they understand their needs more, to facilitate an evolution in interaction and even digitalization,” according to Andrew Glass, founder of Avatar Commodities Pte and formerly head of iron ore financial trading at Anglo American Plc.

Still, launching new sales channels also has its risks, and companies need to be mitigating them at the same time as extending their supply chain, Glass warned.

Tight Race

The initiatives follow similar strategies adopted by Vale since 2015. The Brazilian miner, which is still grappling with the effects of a fatal dam disaster earlier this year, blends and sells from 16 ports in China. It also has a center in Malaysia, where ore can be stored and blended.

In the first for a foreign miner, Vale signed a deal with a Chinese steel mill based on prices of iron ore futures on the Dalian Commodity Exchange.

While Vale has had a headstart in sales efforts, Rio is catching up, according to Kallanish’s Gutierrez. “Now that the port stock market is more developed, and the sales mechanisms are developed, then all the miners will need to compete in this area.”

“The enhancement of having things like port stocks and port trade allows flexibility, and allows smaller parcel deliveries to customers,” Rio’s iron ore Chief Executive Officer Chris Salisbury said in an interview last week.