BHP stated that it aims to increase iron ore production above 305 million tons per year over the medium term. Options for Western Australian Iron Ore (WAIO) to increase to 330 million tons per year are also under consideration, with the studies over it is expected to be completed by 2025 which include developing new mines, expanding and strengthening existing infrastructure (including at Yandi and Port Hedland), increasing ore beneficiation and building a new hub.
For the 2024 fiscal year, WAIO production figures remain at similar levels to the previous year at 282-294 million tons, while the company's EBITDA for iron ore increased 27% y-o-y to $9.6 billion in the first half ended December 31, 2023. The increase was attributed to higher average realized prices for iron ore and lower diesel prices.
The company forecasts an improvement in global steel production for the next two years. For 2024, it expects Chinese steel production to hover in the range of 1-1.1 billion tons per year and a modest growth. How effectively China's stimulus policy is implemented in real estate and how the government chooses to regulate steel production are said to be influential factors in 2024.
In India, a strong growth year is predicted due to continued demand for construction. In the medium term, it underlines that the Indian government is targeting an annual steel production capacity of 300 million tons by 2030.
For 2024, the firm expects an overall balanced market but a slight slowdown in supply and demand growth compared to the previous year's rates, while the real-time cost support forecast remains unchanged from the previous reporting period at 62% Fe cfr in the range of $80-100/ton. In the medium term, China's iron ore demand is expected to be lower than today as it outstrips crude steel production and the scrap-to-steel ratio rises, while product demand from other emerging parts of Asia will offset this to some extent.
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