BHP iron ore sales, targets fall short

afr.com:

BHP has hosed down expectations for its iron ore division by providing weaker production guidance for the 2024 financial year than many analysts had expected.

The dovish outlook for 2023-24 came as BHP revealed its most important division had also sold less Australian iron ore in the past three months than forecast. The dual disappointments could trigger downgrades to earnings forecasts ahead of BHP’s full-year financial results due next month.

BHP sold 71.1 million tonnes of iron ore in the June quarter, below the 73 million tonnes implied by analyst consensus.

Sales volumes were lower than the volume of iron ore dug up out of the Pilbara, which continued to produce at record rates. BHP mined 4.6 million tonnes more ore than it sold in the year to June 30.

BHP said most of that 4.6 million tonnes was stockpiled in China awaiting sale, suggesting the company could sell more than it mines in the year ahead.

Weather disruptions and ongoing refurbishment of port infrastructure had also hampered its export rate.

The miner sold 280.7 million tonnes of Australian iron ore in 2022-23, a rare sequential decline in annual sales and BHP’s weakest performance in four years. Looking ahead, UBS had forecast BHP to produce 291 million tonnes in the 2024 financial year, and set a target between 285 million and 295 million tonnes.

But BHP underwhelmed on that target, pledging to “produce” – or dig up – between 282 million and 294 million tonnes. The bottom end of that range is particularly cautious; BHP dug up more than 285 million tonnes of iron ore over the past year and more than 284 million in 2021.