Connect with us
https://tickernews.co/wp-content/uploads/2023/10/AmEx-Thought-Leaders.jpg

Money

Post Market Wrap | BHP’s March 2022 operational performance impacted by COVID-19

Published

on

This Post Market Wrap is presented by KOSEC – Kodari Securities

  • Iron ore and coal production volumes and prices remain strong
  • Copper and nickel production volumes impacted by COVID related labour shortages   
  • Potash projects under development in Canada remain on track 
  • Merger of BHP’s oil and gas interests with Woodside Petroleum set for completion on 1 June
  • Skill shortages and overall labour market tightness expected to continue into 2023
  • Long term outlook supported by rising living standards, global population growth and future infrastructure expenditure on decarbonisation solutions.

BHP is a world leader in producing and processing mineral commodities. It has 80,000 employees and contractors, based primarily in Australia and the Americas. BHP is the world’s lowest cost major producer of iron ore. The Company also produces copper, nickel and metallurgical coal at scale and has committed to a significant investment in potash, a natural ingredient for fertiliser.  

March 2022 Operational Review 

COVID induced skilled labour shortages and wet weather have hampered BHP’s production activity during the March quarter, according to production volume details released this morning. However, record high prices for metallurgical coal and continuing high prices for iron ore are supportive of a satisfactory June 2022 financial year profit result.

BHP confirmed its original 2022 production guidance for iron ore, metallurgical coal and energy coal. The Company is taking advantage of record high prices for higher quality energy coal by increasing the proportion of thermal coal sourced from its NSW Energy Coal mine sites. 

Full year copper production guidance has been reduced to between 1570 and 1620 kt, from between 1590 and 1760 kt, and actual production is down 10 percent for the 9 months to March 2022, compared to the 9 months to March 2021. The reduced operational workforce, as a result of significant increases in COVID-19 cases, has resulted in lower production volumes from BHP’s Escondida mine in Chile. Similar operational workforce constraints in Western Australia have cut nickel production volume by 13 percent in the March quarter, compared to the March 2021 quarter volume. BHP has lowered nickel production volume guidance for the year by about 10 percent from original estimates.  

BHP’s potash projects in Canada are tracking to plan with the initial production target dates of calendar year 2027 remaining firm. 

The merger of BHP’s oil and gas interests with Woodside Petroleum is set for completion on 1 June, following Woodside shareholder approval on 19 May. 

Looking Ahead

The BHP earnings outlook remains cautious. 

BHP has previously flagged higher labour costs arising from COVID related skilled labour shortages and this cost imposition had been factored into market earnings estimates. However, BHP’s warning that 2022 guidance is subject to further potential negative impacts from COVID-19 during the 2022 financial year remains a lingering cause of concern. 

The Company also warned that market volatility and inflation pressures have increased further because of the Russian war on Ukraine.  Skill shortages and overall labour market tightness is anticipated to continue in the period ahead, in both Australia and Chile. Furthermore, BHP do not expect these conditions to improve until the 2023 financial year.

Although the BHP production outlook is facing short term headwinds, the long-term picture remains positive. Global population growth, future infrastructure expenditure on decarbonisation solutions and rising living standards are driving demand for clean energy, metals and fertilisers. BHP is leveraged to these global mega-trends, implying consistent earnings growth over the long term. 

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

Continue Reading

Money

RBA stands pat on interest rates as hopes dim for future cuts

Published

on

RBA stands pat on interest rates as hopes dim for future cuts

Stella Huangfu, University of Sydney

The Reserve Bank kept the cash rate steady at 3.6% at today’s meeting. In its post-meeting statement, the central bank said the monetary policy board

judged that it was appropriate to remain cautious.

This pause follows three cuts earlier this year — in February, May and August, each by 25 basis points — which lowered the cash rate from 4.1% to its current level. Governor Michele Bullock said the bank is watching those previous cuts work through the economy.

Bullock stressed that while inflation has eased from its peak, progress remains uneven, and the bank is not ready to declare victory.

For now, patience is the safer course. The next big test will be the September quarter inflation report, due at the end of October. That release will go a long way to deciding whether cuts resume later this year or slip into 2026. Market pricing, once confident of a November move, now sees the odds as little better than a coin toss.

“By the next meeting in November, we’ll have more data on the labour market and inflation data for the September quarter,” Bullock told a press conference after the meeting.

Why the RBA is waiting

The monthly consumer price index (CPI) for August showed annual inflation rising to 3.0%, up from 2.8% in July. Although this is a 12-month high, much of the increase came from the expiry of electricity rebates — a temporary factor the bank had already anticipated.

Bullock has repeatedly said the Reserve Bank puts more weight on the quarterly “trimmed mean” inflation measure — a point she emphasised most recently before the House of Representatives economics committee. This measure strips out one-off price swings and gives a clearer picture of underlying inflation.

Even so, the monthly figures show the annual trimmed mean edged down from 2.7% in July to 2.6% in August. That suggests the underlying trend remains one of gradual disinflation (a slowing in the pace of price increases), despite the lift in the headline rate.

Bullock told reporters:

The monthly data are volatile […] I don’t want to suggest that inflation is running away, but we just need to be a little bit cautious.

Progress is not yet secure. Inflation must stay within the 2–3% target range on a sustained basis before the Reserve Bank can cut with confidence. Moving too early risks undoing hard-won gains and forcing harsher measures later.



Other data reinforce this cautious approach. June quarter economic growth surprised on the upside, showing the economy is more resilient than expected. Meanwhile, unemployment has ticked higher but remains low, pointing to a labour market that is cooling only gradually.

As the statement noted,

private consumption is picking up as real household incomes rise […] The housing market is strengthening […] Credit is readily available to both households and businesses.

Together, these signals give the Reserve Bank space to pause rather than rush into easing.

A big shift in expectations

The major banks have also adjusted their forecasts. NAB has ruled out any further move this year, dropping its earlier forecasts for November and February cuts and now expecting the next reduction in May 2026. Westpac still expects a November cut, but acknowledges the timing could slip.

Financial markets have also pared back their bets. Pricing once implied near-certainty of a November cut, but that probability has now fallen to roughly 50-50.

The September quarter consumer price index will be decisive: a softer result could revive expectations of an earlier cut, while a stronger one would reinforce the view that rate cuts will not resume until 2026.

With the economy stronger than forecast and CPI a touch higher, both banks and markets are pushing out the timing of cuts. The Reserve Bank’s message is clear: inflation must show sustained progress before policy can be eased. Until then, the next cut is a matter of when, not if.

Rates around the world

The Reserve Bank is not alone in being cautious. In the United States, the Federal Reserve delivered three cuts in 2024, but only made its first cut of 2025 in September. The European Central Bank has reduced rates four times this year, but has kept policy steady since June.

Political tensions, volatile energy prices and fragile global growth all add to the uncertainty, reinforcing the case for patience in Australia.

For households, today’s decision offers no relief. Mortgage repayments remain at an elevated level and consumer spending is weak.

Looking ahead, the Reserve Bank said it will remain data-driven and responsive to risks:

The Board will be attentive to the data […] focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.

For households, that means the wait for relief goes on. The next move is a cut, but today’s decision makes clear it won’t be rushed.The Conversation

Stella Huangfu, Associate Professor, School of Economics, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Continue Reading

Money

Markets remain strong amid potential government shutdown fears

Markets remain strong as investors anticipate jobs data while ignoring government shutdown and tariff concerns

Published

on

Markets remain strong as investors anticipate jobs data while ignoring government shutdown and tariff concerns

video
play-sharp-fill
In Short:
– Major indices are near session highs, with the Dow up 382 points and resilient to shutdown concerns.
– Rising Treasury yields may challenge bullish sentiment, while upcoming economic reports will influence market direction.
Major indices are trading near session highs, with the Dow Jones Industrial Average up by 382 points, the S&P 500 by 41 points, and the Nasdaq Composite by 100 points.
Investors seem undeterred by the looming government shutdown and new tariff announcements. Despite the challenges, markets appear resilient due to previous experiences with shutdowns.Banner

This coming week, markets should brace for monthly jobs data, assuming no shutdown occurs. Previous initial claims reports have lessened after reaching 263,000 on September 11.

Technical indicators show promise following a retreat to the 20-day SMA. The end of bearish seasonality approaches, coinciding with Q3 earnings season.

Market Perspective

However, rising Treasury yields could pose a challenge for bullish sentiment. The 10-year yield has increased over the past eight trading sessions and may close at a three-week peak.

If it stays below 4.25%, it could support ongoing bullish trends. A notable risk remains the potential negative impact of the jobs report.

Upcoming economic reports include pending home sales, consumer confidence, and nonfarm payrolls, all key to market direction.


Download the Ticker app

Continue Reading

Money

Crypto market plummets near $1 billion in liquidations

Crypto markets crash as liquidations approach $1 billion, marking a severe downturn in September 2025

Published

on

Crypto markets crash as liquidations approach $1 billion, marking a severe downturn in September 2025

video
play-sharp-fill
In Short:
– Cryptocurrency markets declined significantly, with liquidations nearing $1 billion and Bitcoin below $110,000.
– $442 million in positions were liquidated on Thursday, with Ethereum most affected, raising trader concerns.
Cryptocurrency markets faced significant declines on Thursday, with liquidations nearing $1 billion, contributing to a larger selloff that has cost the sector over $160 billion in market capitalisation.
Bitcoin fell below $110,000, trading around $111,400, while Ethereum dipped below the critical $4,000 support level, marking its lowest point in seven weeks.
The global crypto market capitalisation dropped by 2.2% to $3.91 trillion.Banner

Liquidation reports revealed that $442 million in positions were forcibly closed on Thursday, with Ethereum most affected, accounting for over $180 million.

The previous week saw a larger liquidation event, with $1.7 billion wiped out. Traders are concerned as a significant number of long positions were liquidated in this downturn.

Market Trends

Market analysts highlight a pattern of leveraged trading leading to cascading selloffs. Seasonal factors, regulatory uncertainty, and a strengthening US dollar contributed to the declines.

Despite the downturn, some large investors are taking the opportunity to accumulate assets.


Download the Ticker app

Continue Reading

Trending Now