BHP’s new WA iron ore boss Tim Day not hung up on China property woes

BHP’s newly-anointed iron ore boss Tim Day is bullish China’s hunger for Pilbara produce will be sated by new sectors of the economy, despite admitting appetite from a hard-hit residential property market has plateaued. The new chief met with executives of WAIO’s biggest customer, China Baowu Group, this week as part of Beijing’s landmark visit to Perth that saw mining and political bigwigs line up for meetings on the next stage of their crucial resources relationship. Mr Day told The West Australian the high level view was that China’s industrial activity had started to “plateau to some degree” but he was nonetheless upbeat there would be plenty of new demand sources. “Construction will inevitably slow down ... and that’s what you’re seeing. But equally what you’re seeing is growth in other steel areas like machinery, renewable energies,” he said. “You’re seeing growth in those areas, fairly consistently. There’s other parts that are now playing a bigger part of that entire economy that still require steel.” Mr Day said he could see demand for steel in the Middle Kingdom tapering off slightly, but he believed the property sector wasn’t the only barometer to measure. “You’re still going to need fairly big numbers going through China for the foreseeable future,” he said. Cooler iron ore prices are largely being blamed on a lack of new activity in China’s steel-hungry property market. Uncertainty surrounding the typically opaque area of housing construction has also lead to wildly varying price estimates. Some more bearish analysts have predicted prices could dip below $US80/t in the medium term, an outcome Mr Day said wouldn’t be “ideal” for the Big Australian, but suggested could be still be absorbed. Iron ore started 2024 at about $US136/t but plunged below $US100/t during March. It has broadly managed to stay above that marker since. The target of producing commercially viable green steel — or at least slashing emissions from the production process — will also be an area of focus for BHP and Baowu, Mr Day said. “We’re going after it as well, in terms of trying to make sure ESF (electric smelting furnaces) and other things are options for us and making sure we understand them well, particularly for Pilbara ores,” he said. “We piled in even harder saying ‘right, how can help each other actually work through the green steel journey?’” BHP and Baowu signed an agreement back in 2020 agreeing to find ways to reduce emissions from the carbon-intensive process of steelmaking. Mr Day has been running BHP’s revenue-driving division since February, taking over from predecessor Brandon Craig who was tapped to lead BHP’s Americas division earlier this year.