BHP’s latest Economic and Commodity Outlook shows iron ore prices holding steady and copper demand growing strongly in the first half of 2025.
According to the report, Iron ore prices stayed fairly stable over the six months, supported by high activity in Chinese steel production and several supply issues. These included weather problems affecting shipments and ongoing safety checks at Chinese mines, which led to lower stockpiles at major Chinese ports.
The Big Australian expects shipments to return to normal soon, with port inventories likely to increase over the next year.
In its estimates, BHP states that iron ore prices need to stay between 80 and 100 US dollars per tonne, delivered cost and freight (CFR) to keep production profitable.
“…we expect a sizeable portion of marginal seaborne supply to start to come under pressure when prices breach the upper half of this range in the near-term,” the report noted.
Looking ahead, BHP expects the Simandou project in Guinea to start producing higher-grade iron ore by the end of 2025. More supply is also expected from major producers and Chinese mines.
However, these new supplies could be balanced out owing to a number of factors.
“Traditional supply basins might require more investment to sustain production in the face of grade decline and resource depletion. Wood Mackenzie estimates [nearly] 250Mt of operating supply will deplete in the seaborne market over 2025–2035,” the report said.
“We also expect India, which reliably exported an average of [nearly] 30Mt per annum in the past nine years to the seaborne market, to increasingly become an opportunistic importer, with potential upside during periods of domestic supply disruption.”
For copper, recent price gains were influenced by uncertainty over US tariffs. Prices in the US market were higher than in London until copper cathode was excluded from tariffs. Chinese copper demand grew by 8 percent in the first half of the year, driven by government replacement programs and increased exports.
The copper market is expected to stay mostly balanced soon, but supply delays and rising trade barriers could make conditions tighter.
Want to connect with the mining industry, register to attend AIMEX and WA Mining Conference.
