必和必拓(BHP Billiton)的前景持乐观态度ommodity Demand: China Will Be The Biggest Driver

Global mining giant BHP Billiton released its semi-annual report on Tuesday.

BHP said it was optimistic about the outlook for bulk demand in the 2024 financial year, as China, the world's largest consumer of metals, has reopened and adjusted its policies towards the property sector, despite a lower-than-expected profit in the first half of fiscal 2023, which ends at the end of December 2022.

BHP Billiton's first half of the fiscal year was not good

For the first half of fiscal 2023, BHP posted a net profit of $6.46 billion, missing analysts' expectations of $7.42 billion. Underlying profit from continuing operations of $6.60bn was well below $9.72bn a year earlier and below the $6.82bn forecast by market analysts.

"There's nothing we didn't expect," said David Lennox, an analyst at Fat prophet, an investment adviser in Sydney. "The main reason we have a 'hold' rating on BHP is that their share price is at an all-time high and they would have to perform fairly well to justify that level."

BHP also warned that it now expects the marginal cost of mining production to be significantly higher than before the pandemic.

BHP's interim dividend for the first half of FY2023 was 90 cents per share, down from last year's level of $1.50 per share but beating Vuma Financial's forecast of 88 cents.

China will be the main driver

"We are optimistic about the demand outlook for the second half of FY2023 and FY2024, with strengthening economic activity in China on the back of recent policy decisions being the key drivers," said Mike Henry, chief executive officer of BHP Billiton LTD.

"We expect stronger domestic demand in China and India to provide a stable balance to global trade amid a continued slowdown in economic activity in the United States, Japan and Europe," he said in a statement.

Last year was a difficult one for miners such as BHP. There have been soaring costs, a tight Labour market and, most fatally, a slump in global demand for iron ore due to the coronavirus pandemic. However, the reopening of China late last year and policy changes in the property sector have left BHP optimistic about the outlook for commodity demand.

"The long-term outlook for our commodities remains strong given population growth, rising living standards and tighter supply and demand for metals, including steelmaking raw materials, as a result of the energy transition," Henry added. He was apparently talking about demand for metals for products such as electric cars and wind power.

However, in an environment where central banks are aggressively tightening monetary policy, BHP expects its operating environment to remain volatile in the short term, but expects China to be a stable source of commodity demand.