BHP Warns of Uneven Recovery in China Impacting Global Markets
Chinese Economic Challenges Affecting Commodities
BHP has warned that the uneven recovery in the Chinese economy poses risks to global commodity markets. The company cited sluggish industrial demand as a key challenge, compounded by rising interest rates.
Steel Demand and Market Volatility
BHP's CEO, Mike Henry, indicated that steel production has plateaued despite remaining at high levels of 1 billion tonnes per year. The collapse of demand from the Chinese property sector has put pressure on iron ore prices, consequently affecting earnings.
- Revenue grew by 3% to $55.7 billion
- Net profit increased by 2% to $13.7 billion
- Profit attributable to shareholders fell by 39% due to significant write-downs
BHP's Future Investments
In light of current conditions, BHP has reduced its full-year dividend by 14% to $1.46. The funds will be redirected towards major projects, including the expansion of copper mines in South Australia and potash operations in Canada. The company also aims to pursue strategic acquisitions.
Henry deemed the fourth-largest dividend in the company's history, signaling confidence in future growth, although he dismissed interest in acquiring Anglo American's coal operations.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.