BHP has warned that China’s continuing economic travails would impact the global commodities market as it reported a mixed bag of results.
In the firm’s annual results, the miner noted that China was experiencing an “uneven recovery”, which would impact commodity markets for the year ahead.
“In the near term, we expect volatility in global commodity markets,” BHP said.
Steel demand is expected to remain weak due to problems in China’s struggling property market.
BHP pointed to the Chinese government’s “decisive policy pivot” earlier this year in an attempt to reduce the market’s oversupply.
Partly as a result of this action, steel production was lower in the first half compared to the previous year, although it is expected to remain above 1bn tonnes for the sixth consecutive year.
Looking elsewhere, the Australian miner pointed to stronger performances in sectors more important for copper, including power infrastructure, transport and consumer durables.
“China is on track to meet official CY24 macroeconomic growth targets, but the property sector is likely to remain a drag,” the firm said.
BHP’s revenue rose three per cent on last year due to higher prices for iron ore and copper. This was partially offset by lower coal and nickel prices as well as lower steelmaking volumes.
Although underlying profit crept up two per cent to $13.7bn (£10.4bn), the firm’s attributable profit fell 39 per cent to $7.9bn (£6bn).
This came after the firm booked a $2.7bn (£2.0bn) write down on its Australian nickel operations and a $3.8bn (£2.9bn) charge due to a dam collapse in Brazil. Shares closed up 1.3 per cent in Australia.