BHP Sees Steel and Copper Demand Rebound Despite Lowest Profit in Six Years

BHP Sees Steel and Copper Demand Rebound Despite Lowest Profit in Six Years

BHP Group, the world’s largest listed mining company, has reported its lowest first-half profit in six years, citing a 23% decline to $5.08 billion. This downturn is primarily attributed to reduced iron ore prices, influenced by diminished demand from China’s property sector. Despite this, BHP observes signs of economic recovery in China and anticipates that central bank rate cuts will rejuvenate demand for steel and copper. However, the company remains cautious about potential global growth risks stemming from trade tensions.

In response to the profit decline, BHP has declared an interim dividend of 50 cents per share, the smallest since 2017. The company also warns that its full-year iron ore production from Western Australia is unlikely to reach the upper end of the projected range of 282 million to 294 million metric tons, due to disruptions caused by Tropical Cyclone Zelia.

While iron ore profits have decreased, BHP’s copper operations have experienced a 44% surge in earnings, bolstered by elevated copper prices supported by Chinese stimulus measures and U.S. interest rate cuts. CEO Mike Henry emphasizes the company’s commitment to organic growth over acquisitions, with plans to invest $4.7 billion in expanding copper operations in the upcoming fiscal year.

Despite global economic uncertainties, BHP remains optimistic about the demand for its products, citing early signs of recovery in China, resilient economic performance in the U.S., and robust growth in India.

Source : Swifteradio.com