News: BHP BHP Group Announces Economic And Commodity Outlook

Feb 20 (Reuters) - BHP Group Ltd (BHP) :

• ECONOMIC AND COMMODITY OUTLOOK
• WITH 2024 CALENDAR YEAR UPON US, UPDATED EXPECTATIONS FOR SHORT–TERM SUPPLY–DEMAND BALANCES
• ANTICIPATE ANOTHER YEAR OF BROADLY BALANCED IRON ORE MARKET ON AVERAGE ACROSS 2024 CALENDAR YEAR
• IMPROVING SUPPLY AND SOMEWHAT FIRMER DEMAND BEYOND INDIA AND CHINA TO PRODUCE BROADLY BALANCED OUTCOME FOR MET COALS IN CY2024
• LOOKING BEYOND IMMEDIATE PICTURE TO MEDIUM TERM, WILL SEE NEED FOR ADDITIONAL SUPPLY, BOTH NEW AND REPLACEMENT, INDUCED ACROSS MANY SECTORS
• CONFIDENTLY STATE THAT BASIC ELEMENTS OF OUR POSITIVE LONG–TERM VIEW REMAIN IN PLACE
• ANTICIPATE GEOLOGICALLY HIGHER–COST PRODUCTION TO BE REQUIRED TO ENTER SUPPLY STACK IN PREFERRED GROWTH COMMODITIES AS DECADE PROCEEDS
• BHP GROUP SEES CY2024 CHINA REAL GDP AT 4½% TO 5%
• NOW SEE REFINED COPPER IN DEFICIT AND A VERY TIGHT SITUATION IN COPPER CONCENTRATE IN CY 2024
• MOVING TO LONGER–TERM, VIEW REMAINS THAT CHINA’S ECONOMIC GROWTH RATE WILL MODERATE AS WORKING AGE POPULATION FALLS, CAPITAL STOCK MATURES
• FORESEE ANOTHER MATERIAL SURPLUS IN TOTAL NICKEL UNITS IN CY 2024
• IN LONG–TERM, FIRMLY BELIEVE THAT BY MID–CENTURY, CHINA WILL INCREASE ITS ACCUMULATED STOCK OF STEEL IN USE
• LOOKING OUT A FEW YEARS, CONSIDER ENTRY OF NEW, HIGHER–GRADE IRON ORE SUPPLY FROM SIMANDOU PROJECT IN GUINEA TO BE A NEAR CERTAINTY
• FIRST IRON ORE TONNES FROM SIMANDOU PROJECT LIKELY TO COME NO LATER THAN FINAL THIRD OF DECADE
• STILL EXPECT STICKER PRICE CROSS–OVER POINT IN MOST MAJOR MARKETS BETWEEN INTERNAL COMBUSTION ENGINE AND EVS IN SECOND HALF OF 2020S
• IN COMING YEARS, MOST COMMITTED AND PROSPECTIVE NEW METALLURGICAL COAL SUPPLY IS EXPECTED TO BE MID QUALITY OR LOWER
• FOR CRUDE MARKETS , SEE BALANCED RISKS IN CALENDAR 2024, WITH ESCALATION IN MIDDLE EAST A WILD CARD
• LONGER–TERM, FEEL POTASH OFFERS VERY ATTRACTIVE FUNDAMENTALS
• ESTIMATE CUMULATIVE INDUSTRY WIDE GROWTH CAPEX BILL OUT TO 2030 TO BRING 10 MT OF COPPER PRODUCTION ONLINE COULD REACH ONE–QUARTER OF A TRILLION DOLLARS
• IF LME NICKEL PRICE IS SET TO $16,000/T, AS MUCH AS ONE-HALF OF GLOBAL PRODUCTION COULD BE LOSS-MAKING ON CASH PLUS SUSTAINING CAPEX BASIS
• FOR NICKEL SPECIFICALLY, ESTIMATE THAT DESTOCKING CONTRIBUTED TO ABOUT 100 KT OF ‘DEMAND LOSS’ ACROSS CALENDAR 2023
• TURNING TO LONGER–TERM FUNDAMENTALS, BELIEVE NICKEL WILL BE SUBSTANTIAL BENEFICIARY OF GLOBAL ELECTRIFICATION MEGATREND