BHP tops June quarter iron ore production expectations

BHP (ASX: BHP) topped production expectations across the board in the June quarter and achieved its full-year guidance for both copper, iron ore and coal output. The company’s stock opened 0.4% higher as the market opened on Thursday.

“Western Australian Iron Ore shipped record volumes on the back of productivity in its supply chain, rail network and car dumpers, while South Flank completed its deployment of autonomous haul trucks in May and is on track to ramp up to full production in the next 12 months,” said CEO Mike Henry.

For the June quarter, BHP produced (vs. consensus expectations):

• Iron ore: 65.3Mt vs. 59Mt expected

• Copper: 476.2kt vs. 463kt expected

• Met coal: 8.5Mt vs. 8.0Mt expected

• Nickel: 22.0kt vs. 21.5kt expected 

From a cost perspective, BHP said full-year unit cost guidance is expected to be achieved at Escondida, Western Australian Iron ORE (WAIO) and New ASouth Wales Energy Coal (NSWEC). Albeit towards the upper end of its guidance range.

BHP’s average realised prices fell for key commodities including iron ore, copper and metallurgical coal, reflecting a challenging macroeconomic backdrop. In summary:

A softer FY24

Despite a clean sweep of production beats in FY23, BHP scaled back expectations for FY24, notably for iron ore.

• Iron ore: 254-264.5Mt vs. 265Mt expected

• Copper: 1,720-1,910kt vs. 1,800kt expected

• Met coal: 28-31Mt vs. 32Mt expected

• Energy coal: 13-15Mt vs. 14.7Mt expected

• Nickel: 77-87kt vs. 88kt expected 

But for some brokers, the iron ore output is in-line with expectations, like Macquarie, which was expecting 260.6Mt in FY24. 

BHP 12-month price chart (Source: Market Index)