BHP Maintains Iron Ore Output Outlook Despite Shaken Economy

BHP Group BHP late Monday maintained its iron ore outlook.

Production and Outlook

BHP iron ore production for the third quarter increased 7% year-over-year to 60.03 kt with record production levels at Western Australian Iron Ore, the company said in a press release. BHP maintains the iron ore production guidance for 2020 financial year between 242 and 253 Mt.

With petroleum production recording a 13% dip in the third quarter, 2020 guidance is expected to be at the bottom range of 110 to 116 MMboe.

Energy coal production was down 18% and guidance for the same is currently under review as Cerrejón coal mine in Columbia is on brief care and maintenance to contain the COVID-19 epidemic.

Steel production, excluding China, is seen to narrow by a double digit percentage in 2020 as steel makers from across Europe, the Americas, India and Japan are under shutdowns or curbed productions for the June quarter.

CEO comments

BHP CEO Mike Henry said that while Chinese demand has built up in the recent weeks, the June quarter would experience narrowing demand from the U.S., Europe and India. Also, capital and exploration guidance for the 2021 financial year is expected to be lower than the current guidance of around $8 billion.

BHP's stock closed Monday 3.2% lower at $38.77 per share and ticked lower another 2.2% in after-hours trading.