Iron ore prices continued their downward trend, with the latest results from mining giant BHP Group Limited showing a decline in profits due to weak demand from China and ample global supply. The steelmaking raw material fell by 0.6% at one point in the Singapore market, marking the fifth consecutive trading day of decline, reflecting the current depressed market sentiment.
BHP attributed the profit decline to falling iron ore and coal prices. However, the company’s CEO, Mike Henry, remained optimistic about the overall earnings report and expressed confidence in the “long-term fundamentals of steelmaking materials, copper, and fertilizers.” In its Economic and Commodity Outlook released on Tuesday, the company noted that while China’s export growth may slow, its competitiveness is expected to remain high. The report also highlighted recent infrastructure projects announced by China, including a major dam in Tibet, suggesting that these measures demonstrate policy flexibility and could provide some support to the market.
This outlook brings a positive signal to the struggling steel market. Against the backdrop of China’s gradually maturing economy and a sluggish real estate market, steel demand has been under pressure. However, BHP also pointed out that increased profitability from its copper assets partially offset the downward pressure from its iron ore and coal businesses.
Graham Slack, Head of Market Analysis and Economics, further added in the report that infrastructure spending and manufacturing expansion in India are expected to drive significant growth in metal demand. He noted that India has exported an average of approximately 30 million tons of iron ore annually over the past nine years and could become an “opportunistic importer,” particularly when domestic supply is disrupted, introducing new variables into the global iron ore trade landscape.
As of 12:05 p.m. Singapore time, iron ore prices fell by 0.5% to $100.95 per ton. Meanwhile, iron ore futures denominated in yuan on the Dalian Exchange and steel contracts in Shanghai also declined. On the London Metal Exchange, copper prices edged up by 0.3%, while aluminum and nickel prices fell.
