Mike Henry, CEO of Australian mining giant BHP, said that recent signs of recovery in China's real estate sector could have a positive impact on the company's demand prospects. Following Beijing's September stimulus package to revive the economy, “green shoots” have been observed in China's construction sector, especially due to their dependence on iron ore and copper demand.
Speaking to a news channel in Tokyo, Henry said that China's economy is starting to leave the difficult period behind, “We are finally starting to see some green shoots. Consumer confidence is picking up again,” he said. However, Henry also pointed out that incentives alone will not be enough and the economic recovery must be based on strong fundamentals.
China tried to stimulate the economy with interest rate cuts and stock market supportive measures in September. Following these incentives, sales at the 100 largest property developers increased year-on-year for the first time in October 2024.
BHP is the world's third largest producer of iron ore, a critical steelmaking ingredient. The health of China's construction sector therefore directly affects commodity prices and the company's profit levels.
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