Australian mining company BHP Billiton has published its commodity outlook report for the financial year 2024.
Accordingly, the company stated that in the financial year 2023 ended on March 31, 2024, China and India led the global steel and pig iron output, while the production in developed regions continued to decline. However, BHP expects that global steel output will show a slight increase in the remainder of the financial year 2024 and into the financial year 2025, with India and Southeast Asia taking the lead, though developed regions will also make some contribution to the production. Moreover, the share of the building construction in China, which has the largest share in the domestic steel demand, is expected to drop to slightly over 20 percent in the financial year 2024. The company maintains its forecast that steel output in China will remain above 1 billion mt in the mid-2020s, while pig iron production is expected to decrease in the coming years due to an increase in scrap usage in steelmaking. Additionally, India is estimated to make up for a portion of China’s anticipated steel production decline after mid-2020s.
Looking at the other commodities, during most of the first half of the current financial year, iron ore prices first declined and then fluctuated in the range of $100-120/mt. However, BHP expects that port stocks, which reached 150 million mt in the first half, will remain higher due to an increase in surplus in the second half, and the surplus will continue into the financial year 2025. In addition to the iron ore, in the financial year 2025, surplus in the global steelmaking coal market is expected to be mild since the supply continues to recover, though the supply of premium coal is likely to stay relatively tight.