Infrastructure spending and manufacturing expansion in India are expected to drive a sharp rise in metals demand
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Hollie Adams
China’s export resilience and policy support, together with strong growth in India, will underpin future commodity demand despite an uncertain global outlook, according to BHP Group Ltd.
The world’s biggest miner said that although China’s economic growth could slow in the coming quarters from a high base, the country’s exports will remain solid, according to its annual economic and commodity outlook published Tuesday.
“The cost competitiveness of Chinese goods that accumulated in recent years, particularly while other countries faced significant inflation, means China’s exports will likely remain relatively resilient,” Graham Slack, BHP’s chief economist, said in the report.
This outlook is a positive signal for the world’s biggest steel market, which has stuttered as the Chinese economy matures and the nation struggles to shake off a years-long property slump. China’s steel exports have remained resilient, pumping out 9.84 million tons in July — up from the previous month — despite some predictions it would fall and weaker nationwide output.
BHP’s full-year underlying profit fell by over a quarter as key earners iron ore and coking coal came under pressure. Still, the company, which sells a significant proportion of its exports to China, sees recent infrastructure announcements, including a major dam project in Tibet, as underscoring Beijing’s policy flexibility and willingness to invest, Slack’s report said.
BHP also noted that additional supply from Guinea’s giant Simandou project, expected to deliver high-grade iron ore fines, may not compete for supply with BHP’s Western Australian Pilbara mid-grade assets, and the potential worsening oversupply issue could be softened by grade depletion in traditional hubs.
Meanwhile, infrastructure spending and manufacturing expansion in India are expected to drive a sharp rise in metals demand, Slack said. The nation, which has exported an average of 30 million tons of iron ore annually over the past nine years, is likely to become an “opportunistic importer,” particularly during periods of domestic supply disruption, he added.
For copper, BHP expects Chinese demand in 2026 to remain strong, although it may slow slightly from highs as tariffs make impacts. The disruptions to mine supply globally could also offer support, the report said.
Iron ore fell 0.4% to $101.05 a ton at 3:17 p.m. Singapore time, while yuan-priced futures on the Dalian exchange and steel contracts in Shanghai edged lower. Copper rose 0.4% on the London Metal Exchange, while aluminum dropped 0.4% and nickel was flat.
©2025 Bloomberg L.P.
Published on August 19, 2025
