BHP Group PLC (LON:BHP) has reported an increase in iron ore and a fall in copper production in the fourth quarter, adding that the risk over second waves of the coronavirus pandemic was the biggest uncertainty to its outlook.
The FTSE 100-listed Anglo-Aussie miner mentioned China 22 times in its outlook statement, showing the importance of the expected industrial rebound from the virus by the People’s Republic.
BHP noted that prices have recovered slightly as the pandemic has disrupted supply to partially offset lower demand, but reiterated its view that steel production outside of China could shrink by a double-digit percentage in 2020, the decline for copper “will be less severe than for steel” and that the energy coal market “is in a difficult state”.
Some 67mln tonnes of iron ore were produced in the last three months of its financial year to June 30, 2020, up 11% on the preceding quarter, in line with guidance, while 414,000 tonnes of copper were unearthed, down on the previous quarter but above expectations.
BHP lowered its 2021 copper guidance to 1.48mln-1.65mln tonnes given coronavirus impacts in Latin America, while for iron ore the guidance is for 244mln-253mln tonnes, with the lower end of the range being 2% lower than the past year and the upper-end 2% higher.
Fourth-quarter production “was stronger than we had expected as we had modelled more significant disruptions from COVID and weak demand,” said broker Jefferies in a note to clients.