BHP CEO Mike Henry Anticipates Recovery in China’s Property Sector Amid Government Stimulus

BHP CEO Mike Henry has expressed optimism about a potential rebound in China’s property sector over the coming year, driven by recent supportive government policies. Henry acknowledged that the property sector currently represents a “weak point” for steel demand but highlighted positive signs from Beijing’s recent interventions.

“The government has enacted policies recently that are meant to support the property sector… We expect that we could see a turnaround in the property sector in the year ahead,” Henry stated. His comments come as China implements various measures aimed at stabilizing and rejuvenating the property market, which has been a significant contributor to the country’s economic growth.

China has introduced several key policies to bolster the sector, including the elimination of the nationwide minimum mortgage interest rate and a reduction in the minimum down payment ratio for first-time homebuyers from 20% to 15%. Additionally, in May, the central bank allocated 300 billion yuan (approximately $42.25 billion) to local financial institutions to purchase unsold apartments from state-owned enterprises.

On Saturday, Ni Hong, China’s Minister of Housing, affirmed that there is still substantial potential for growth in the property sector as the country continues to urbanize and demand for quality housing persists. Despite current challenges, Henry remains hopeful that these measures will stimulate recovery and growth in the sector.

BHP reported a 2% increase in its annual underlying profits, attributing the rise to strong operational performance and elevated commodity prices. However, Henry noted that steel demand in China remains somewhat volatile, primarily due to ongoing pressures in the property sector.

Nevertheless, BHP remains positive about other areas of steel demand in China, such as infrastructure projects, shipping, and the automotive industry, which are showing robust growth. The positive outlook for these sectors helps offset the challenges faced in the property market.

In Tuesday’s trading, BHP’s Australian shares saw a rise of 1.97%, reflecting investor confidence in the company’s prospects amidst the evolving market conditions in China.