By Rhiannon Hoyle
ADELAIDE, Australia–China’s demand for commodities including iron ore and copper remains robust, the chief executive of mining giant BHP Group said, even as the country’s economic recovery disappoints and its property sector struggles.
Mike Henry said China’s appetite for copper–used widely in manufacturing and construction–is even stronger than the world’s largest miner by market value was anticipating six to 12 months ago and that economic headwinds haven’t translated into reduced commodity demand more broadly.
Authorities have recently stepped up stimulus aimed at re-energizing consumer spending and shoring up China’s troubled property market–measures cited by Citi analysts this week as a tailwind for iron-ore prices as they upgraded their own short-term forecast for the steel ingredient.
Still, Henry cautioned that China’s economic outlook continues to be murky as the latest data stokes concerns about the fragility of its recovery. China is the world’s top buyer of iron ore, copper and a number of other metals.
A private gauge of China’s factory activity fell into contraction in October, according to data released Wednesday by Caixin Media Co. and S&P Global, weighing on prices of metals including copper. A day earlier, official data showed that factory orders shrank and construction activity slowed, reigniting growth concerns.
“There have been some green shoots over the past couple of months, but also some things that clearly aren’t progressing as quickly as some would hope for,” Henry told reporters after an annual shareholder meeting in Adelaide. “So the jury is still out a little bit in terms of how quickly things recover.”
He also said the escalating conflict in Gaza between Israel and Hamas would cast a shadow over the global economy.
“It does bring greater concerns around stability,” Henry said.
BHP doesn’t have any businesses in or sales to the region, so it isn’t directly affected by the war, he said.
“But, of course, it’s something that we keep an eye on in terms of what signals it’s sending, and what ripples it’s sending into the broader global economy,” he said.
Write to Rhiannon Hoyle at [email protected]
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