BHP believes China and India development to buoy demand regardless of revenue dip


BHP Group’s logo adorning the side of its gobal headquarters in Melbourne on February 21, 2023.

William West | Afp | Getty Images

Australian mining giant BHP is optimistic China and India’s growth will boost commodity demand, even as the company reported a steep drop in half-year profits.

“We believe that Chinese growth and Indian growth are going to provide a bit of a counterbalance and support overall growth over the next six to 12 months, and beyond,” CEO Mike Henry told CNBC’s Street Signs Asia” on Tuesday.

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In an earnings release, BHP said the long-term outlook for the company’s commodities “remains strong,” buoyed by population growth, rising living standards and the metals demand accompanying energy transition, which includes steel-making raw materials.

His comments come as the miner recorded a 16% revenue drop in the six months ended December, from $30.53 billion to $25.71 billion. The company’s half-year profits came in at $6.46 billion, 32% lower than the $9.44 billion in the same period a year ago.

BHP attributed the declines to lower iron ore and copper prices. During the six-month period, iron ore prices fell to a low of $80.03 per metric ton on Nov. 1 while copper hit $3.29 a pound on Sept. 27.

We expect to see stronger steel and iron ore demand from China, says BHP

Shares of BHP in Australia closed 0.33% lower Tuesday.

Still, the global miner is optimistic despite slowing growth in the U.S. and Europe.

“As we progress into the second half, and then the year ahead, we’re seeing momentum build in China, which of course bodes well for the products that BHP produces,” Henry said.

China’s reopening and growth in energy transition and automotive industries have stoked demand for commodities like iron and copper, which are significant revenue streams for BHP.

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