BHP Group Ltd announced on Wednesday that the iron ore production volumes for the 2021 financial year are expected to be in the upper half of the guidance range despite a near 2% dip in third-quarter iron ore production, due to the strong performance at Western Australia Iron Ore (WAIO).
Full-year output to be in the top end of the forecast range
BHP announced that the guidance for the steelmaking ingredient for the 2021 financial year remains unchanged at between 245 million tonnes (Mt) and 255 Mt. The miner said that the overall production of iron ore is expected to be at the top end of its forecast range.
Quarterly production slips 2%
BHP Group said that the output for the third quarter retreated by 2% due to bad weather and planned maintenance at its South Flank project. The miner reported significant weather impacts in December 2020, January 2021, and February 2021, and the planned Mining Area C and South Flank major tie-in activity. Commissioning activities for South Flank are expected to commence in the June 2021 quarter.
Robust demand, supply woes drive iron ore prices
The miner said that iron ore prices have been surging to multi-year highs buoyed by the continued strong demand from the world’s top steel producer China, due to commodity-intensive stimulus measures targeted by Beijing to boost the pandemic recovery. The price of the steelmaking ingredient was further bolstered by weak output from Brazilian miners.
The uptick in iron ore prices has been benefiting major iron ore miners such as BHP, Rio Tinto, and Fortescue Metals Group Ltd. Rio Tinto had announced on Tuesday that its quarterly shipments increased 7%, despite lower iron ore output driven by wet weather and labour shortages.
The output from Western Australia on a 100% basis for the quarter declined from 68 Mt a year earlier to 66.7 Mt.
