Iron ore price reverses to losses as weakening China steel consumption drags
Apparent consumption of five major steel products slipped by 2.1% week-on-week.
Jan 18 (Reuters) – Global miner BHP on Thursday reported a 3 percent rise in second-quarter iron ore production year over year and said it expects to meet its full-year target as prices for the steelmaking ingredient outperform forecasts.
BHP’s iron ore output climbed to 72 million tonnes for the three months ended Dec. 31 versus 70 million tonnes a year ago.
UBS had forecast a figure of 69 million tonnes on a 100 percent basis that includes ore mined on behalf of joint venture partners.
BHP maintained internal guidance that it would mine 275 million-280 million tonnes of iron ore in the fiscal year to June 30.
“A strong operating performance in the first half allowed us to capture the benefit of higher prices,” BHP Chief Executive Andrew Mackenzie said in the group’s quarterly operations review.
Earlier this week, rival Rio Tinto reported shipping a record 90 million tonnes last quarter.
The iron ore price stands at around $75 per tonne. However, uncertainty over Chinese demand has led to forecasts for prices to fall to between $51 and $64 a tonne as the year progresses.
Spot iron ore last traded below $52 in June 2017.
In other commodities, BHP’s copper output jumped 20 percent to 429,000 tonnes in the quarter helped by a rise in production from its Escondida copper mine in Chile.
Petroleum production slipped by 6 percent to 48 million barrels of oil.
In the closely watched U.S. onshore shale division, the company said it continued to assess alternatives to exit its onshore U.S. assets and that it would also continue to explore a demerger or an initial public offering.
Last month, BHP appointed four investment bankers to help it sell or a spin off the division, which has proved a disastrous investment for the company.
(Reporting By Rushil Dutta in Bengaluru; editing by Cynthia Osterman)
