BHP sees copper dealing with long-term deficit as demand beats provide (NYSE:BHP)

BHP (NYSE:BHP) will probably be restrained about M&A alternatives and look to exploration, natural progress and better productiveness to boost its output, CEO Mike Henry mentioned Friday.

Bumper income final 12 months imply BHP (BHP) has a sizeable struggle chest at its disposal, however “we wish to be fairly disciplined” on potential offers, Henry informed a Monetary Instances mining convention in London.

“OZ is a nice-to-have, it isn’t vital,” the CEO mentioned, referring to BHP’s A$8.4B bid for OZ Minerals (OTCPK:OZMLF) in August that was rejected by shareholders, which prompted hypothesis the corporate may return with an upsized provide.

Henry mentioned he was cautiously optimistic on the outlook for China, which he sees offering “a little bit of stability or underpinning to international financial progress over the subsequent 12 months. We’re seeing some inexperienced shoots,” pointing to elevated property gross sales and completions.

The CEO additionally predicted the copper market will probably be in “a bit bit oversupply” within the subsequent few years earlier than probably swinging to a deficit by the top of the last decade because the vitality transition accelerates and extra simply accessible, richer seams of copper turn out to be harder to search out.

The chance is there will probably be “a mismatch between the timing of enhance in demand and when provide meets that demand,” Henry mentioned.

Freeport McMoRan CEO Richard Adkerson mentioned this week that copper futures which have fallen almost 30% from a peak in March don’t replicate a “strikingly tight” bodily marketplace for the steel.