The company logo adorns the side of BHP's global headquarters in Melbourne on February 21, 2023. – The Australian multinational, a leading producer of metallurgical coal, iron ore, nickel, copper and potash, said net profit fell 32 percent year-on-year to US$6.46 billion in the six months to December 31. (Photo: WILLIAM WEST/AFP) (Photo: WILLIAM WEST/AFP via Getty Images)
William West | AFP | Getty Images
BHP The company's CEO Mike Henry said he expects China's real estate sector to rebound next year on the back of favorable government policies.
Although he acknowledges that the country's real estate sector is a “weak spot” for steel demand, Henry is optimistic about a package of measures recently announced by the Chinese government.
“The government has recently approved policies aimed at supporting the real estate sector… and we expect to see a turnaround in the real estate sector next year,” Henry said.
In recent months, China has rolled out a series of measures aimed at stabilizing the country’s property sector, which previously accounted for about 25% to 30% of the country’s gross domestic product. For example, Beijing scrapped the nationwide minimum mortgage interest rate and lowered the minimum down payment for first-time buyers to 15%, from about 20% previously.
In May, the central bank also announced it would allocate 300 billion yuan ($42.25 billion) to financial institutions to lend to local state-owned enterprises to buy unsold apartments that have already been completed.
There is “great potential and space” for China's real estate sector to expand as the country continues to urbanize and demand for quality housing continues to grow, Housing Minister Ni Hong said Saturday.
BHP reported a 2% rise in annual core profit on Tuesday, attributing the growth to “strong operating performance and higher commodity prices in key commodities.”
However, Henry noted that there was still “some volatility” in China's demand for steel, which was under pressure from the real estate sector.
But the CEO said there are other sectors in China that contribute to steel demand and are growing very healthily, such as infrastructure, shipping and automotive.
Australian stocks BHP Technology stocks rose 1.97% in Tuesday trading.
