Monsters of Rock: BHP’s big year and battery metals comeback

BHP boss Mike Henry has hailed resilient commodity demand as the world’s biggest miner reported record iron ore and copper results.

BHP says commodity demand remains solid despite tariff fears. Pic: Getty Images

• BHP sees "resilience" in commodity demand amid trade stoushes

• Big Australian posts copper and iron ore records

• Lithium and graphite stocks rise with higher prices and US tariffs respectively

BHP (ASX:BHP) CEO Mike Henry has shrugged off concerns about global trade, calling commodity markets resilient despite a porous Chinese property market and the impact of Donald Trump's tariffs on the Middle Kingdom's exports.

The Big Australian is strongly wedded to the Chinese economy, producing a record 290Mt of iron ore from its Pilbara operations in FY25 while it increased met coal sales by 5% after the sale of its Blackwater and Daunia mines to Whitehaven Coal (ASX:WHC) last year was taken into account.

It also lifted copper output 8% to 2.017Mt, with its flagship Escondida mine in Chile lifting 16% to a 17-year high of 1.305Mt.

Unit costs are expected to be on track, with Escondida and NSW energy coal divisions exceeding the top end of guidance, while the Spence, WA iron ore and BMA (Qld coal) ops were all in the upper half of the guidance range.

"Commodity demand globally has remained resilient so far in 2025," Henry said.

"That resilience largely reflects China’s ongoing ability to grow its overall export base despite a significant decline in exports to the USA and its ability to deliver robust domestic demand despite the dislocation in the property sector.

"Copper and steel demand have benefited from a sharp acceleration in renewable energy investment, electricity grid build out, strong machinery exports and EV sales.

"While slower economic growth and a fragmenting trading system remain potential headwinds, stimulus efforts by China and the USA would help to mitigate the near-term impact.

"Going forward, China’s 15th 5-year plan is likely to provide more visibility on policies to sustain longer term growth and development.”

At 70Mt on an equity basis and 77.5Mt on a 100% basis, BHP's iron ore shipments rose 14% to a quarterly record in the three months to June 30.

But prices were down 8% QoQ and 12% YoY to US$79.93/wmt FOB, with full year pricing 19% lower at US$82.13/t.

It comes as traders get more bullish on China in the hopes capacity controls and potential stimulus could revive property demand, with iron ore up 1.6% in Singapore this morning to US$102.45/t.

Jansen pottering

But not all is well.

A predictable update saw BHP lift cost estimates for its Jansen potash mine in Canada from US$5.7bn to US$7-7.4bn, with the company reverting the first stage of the development to its original completion timeline of mid-2027.

Guidance is a little hum-drum for next year as well.

Copper production for FY26 is guided at 1.8-2Mt, with Escondida's output forecast to fall, iron ore 284-296Mt, the Samarco JV with Vale in Brazil is forecast to lift from 6.4Mt in FY25 to 7-7.5Mt in FY26, while steelmaking coal will come in at 36-40Mt on a 100% basis and the Mt Arthur thermal coal mine will deliver 14-16Mt, around the same as its 15Mt output in the past year.

RBC's Kaan Peker said the guidance was in line with consensus, saying strong operating and cashflow performance in Q4 would lead the stock to trade well today, offset by the Jansen news.

Net debt of US$13bn was below RBC's and consensus estimates of US$13.9bn and US$14.2bn.

BHP's Nickel West business will also report US$250-300m of negative EBITDA for the second half of FY25, after shutting down progressively over the course of the year in response to high costs and weak nickel prices caused by oversupply out of major producer Indonesia.

Battery metals not booming, but maybe blooming

A little bit of positivity creeping in for battery metals producers, with China starting to crack down on "illegal" mining activities at loss-making operations.

In a situation that largely benefits battery maker CATL and EV giant BYD, a radical ramp up in production by Chinese producers, along with supply rushes a couple years back out of Africa, WA and South America, has sent lithium into a deep oversupply situation.

That's left the industry in the Middle Kingdom effectively eating itself at the expense of BYD and CATL's bottom lines as they try to get battery costs down for electric vehicle buyers.

But China's Zangge Mining – a subsidiary of Zijin – said local officials in Qinghai had told it to halt mining, according to a notice on the Shenzhen Exchange, Reuters said.

The response has been swift.

According to Fastmarkets, lithium carbonate prices were up US$200 to US$8500/t yesterday, with spodumene rallying to US$722.50/t from US$700/t thanks to a rise in futures prices.

However, S&P Global reported that a slow down in US demand was hurting the lithium market, with power battery sales in China also growing at just 1% in May compared to 30.7% in March and 6.4% in China.

Further data from the China Automotive Power Battery Industry Innovation Alliance shows installations in June lifted 1.9% MoM, but 35.9% YoY, with CATL and BYD accounting for 65% of the market between them.

For the whole first half installed capacity rose 47.3% in China to 299.6GWh.

S&P says low cost brine producers are also hampering the supply-demand balance by ramping up output in a bid to dilute fixed costs.

With lithium prices running higher and the Zangge news, Pilbara Minerals (ASX:PLS) shares lifted 6.35%, Mineral Resources (ASX:MIN) rolled 5% higher, IGO (ASX:IGO) ran 2% and Liontown Resources (ASX:LTR) was up 6.5%.

Graphite run

Not to be outdone, it's been a good morning for graphite bulls, thanks to the announcement of a 93.5% anti-dumping duty on Chinese natural and synthetic graphite producers in the US.

The measure was lobbied for by a consortium of American graphite hopefuls, including Novonix (ASX:NVX) and Syrah Resources (ASX:SYR), which are attempting to establish, respectively, synthetic and natural graphite based battery anode material factories in the US.

NVX shares charged 18% after the preliminary determination by the US Department of Commerce, which would make the effective tariff rate on Chinese graphite some 160%. Final determinations on the DoC investigations are due on December 5.

Novonix CEO Michael O'Kronley said the decision underscored the 'strategic importance' of building a North American graphite supply chain. It owns one operating plant in Chattanooga, with Riverside, while a second known as Enterprise South is also being planned for an eventual total production rate of 50,000tpa.

"It affirms our business strategy as well as the diversification strategy of our customers to source critical battery materials and components locally," O'Kronley said.

"Novonix, with the most advanced synthetic graphite production facility in North America, will be increasing significantly the United States production of an essential strategic mineral while strengthening American manufacturing, and creating high-quality jobs locally.”

The ASX 300 Metals and Mining index rose 3.63% over the past week.

Which ASX 300 Resources stocks have impressed and depressed?

Making gains 

Iluka Resources (ASX:ILU) (mineral sands/rare earths) +33.8%

ioneer (ASX:INR) (lithium) +25%

IperionX (ASX:IPX) (titanium) +23.8%

Lynas (ASX:LYC) (rare earths) +21.9%

Eating losses 

Ora Banda (ASX:OBM) (gold) -10%

Vulcan Energy Resources (ASX:VUL) (lithium) -8.9%

Catalyst Metals (ASX:CYL) (gold) -6.8%

South32 (ASX:S32) (diversified) -5.8%

After the news of the DoD and Apple's big investments in US rare earths producer MP Materials, investors are lining up in both rare earths and US critical minerals, powering the outsized gains for Iluka, Ioneer, IperionX and Lynas.

South32 was a notable loser given its $13bn heft, flagging issues around electricity supply at its Mozal aluminium smelter in Mozambique.

Originally published as Monsters of Rock: BHP’s big year and battery metals comeback