BHP Group Ltd's stock fell sharply by 5.00% during intraday trading on Friday, underperforming the broader market as the mining giant faced a dual headwind of company-specific challenges and sector-wide pressure.

The decline follows reports that China Mineral Resources Group, the country's state-run buyer, has expanded restrictions on purchases of BHP's seaborne iron ore cargoes. This move escalates an ongoing contract dispute, with the new curbs affecting multiple ore types including Mac fines, Newman fines, and Newman lumps, building upon earlier restrictions imposed in late 2025.

Simultaneously, the Australian mining sector faced significant selling pressure, with the mining sub-index tracking lower copper prices amid a firmer U.S. dollar and uncertainty surrounding smelters in the war-hit Middle East. The sector was set for its worst weekly decline in nearly three and a half years, contributing to BHP's poor performance during the session.