GlobalGrowth
On China, BHP expects demand to improve in fiscal 2023, although it also nodded to lingering risks from Covid-19 lockdowns and the deep slump in construction. The world’s No.2 economy will be a source of stability in the coming year and “perhaps something much more than that” if property activity recovers. The company flagged weaker growth in other key regions stemming from geopolitics and Covid-19. “This is particularly evident in advanced economies, as central banks pursue anti-inflationary policy and Europe’s   energycrisis is an additional source of concern,” BHP said.

Steel
Though there should be a steady improvement in China’s demand, a “slower than expected rebound in construction post Covid-19 lockdowns has dampened sentiment across the steel value chain,” BHP said. Elsewhere in the world, profitability for steelmakers is also declining on weaker demand and markets are likely to remain under pressure this fiscal year as the macroeconomic climate softens.

IronOre
The steel-making ingredient is likely to remain in surplus through fiscal year 2023, BHP said, noting stronger supply from big miners and more competition from scrap. Key near-term uncertainties are the pace of steel end-use demand recovery in China, disruptions to seaborne supply, and Chinese steel output cuts. Looking further, BHP said Chinese steel production and iron ore demand will plateau in the mid-2020s.

CokingCoal
After touching record highs, prices for coal used in steel-making face uncertainty over China’s import policy and Russian exports. The key seaborne supply region of Queensland has become “less conducive to long-life capital investment” after announcing plans to raise royalties on producers, BHP said. The fuel will still be used in blast-furnace steel-making for decades, supporting long-term demand, the producer said.