😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

BHP, Rio Tinto shares rally on strong production, China hopes

Published 19-01-2023, 10:47 am
© Reuters

By Ambar Warrick 

Investing.com -- Shares of Australian mining giants BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO) rose on Thursday following strong production reports from both firms, as well as increased optimism over an economic recovery in China, their biggest market.

BHP’s Australian shares rose 1.4% and were trading just below a record high, while those of Rio Tinto jumped 3% to a 10-month high.

BHP posted better-than-expected quarterly iron ore shipments, and logged record-high iron ore production in the six months to December 31. The miner also said that China will be a “stabilizing force” for commodity demand in 2023, as the country scales back its strict zero-COVID policies.

Still, the world’s largest miner saw a substantial drop in realized iron ore prices during the December quarter. But this was also somewhat offset by a large jump in the realized prices of thermal coal shipments, amid increasing energy demand across the globe.

Rio Tinto, the world’s second-largest miner, logged stronger iron ore shipments during the December quarter. The miner also flagged a coming increase in copper production, as it incorporates the recently-acquired Turquoise Hill assets and ramps up production in its Australian sites.

But the miner struck a more cautious tone over China, warning of near-term risks to labor and the supply chain as the country reopens from three years of lockdowns. 

Still, commodity markets are set for a resurgence in demand with China’s reopening, given that the country is one of the world’s largest commodity importers. Oil and copper prices logged strong gains after the country reopened its international borders earlier this month. 

Members of the International Monetary Fund recently opined that the country could see a strong economic recovery by as soon as the second quarter of 2023.

But China is also grappling with its worst yet COVID-19 outbreak, which has brewed some uncertainty over the timing of a bigger recovery this year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.