BHP’s CEO, Mike Henry, expressed his belief that China’s property market is poised for a recovery in the coming year, supported by recent government interventions.
Although he acknowledged the property sector’s current challenges as a “weak point” for steel demand, Henry remained confident in the Chinese government’s recent policy measures designed to bolster the sector.
Henry observed that the government has introduced policies aimed at revitalizing the property market, leading him to anticipate a potential turnaround in the next year.
In recent months, China has implemented various strategies to stabilize its property market, which previously accounted for an estimated 25% to 30% of the nation’s GDP. Among these measures, Beijing eliminated the nationwide minimum mortgage interest rate and reduced the minimum down payment requirement for first-time homebuyers from 20% to 15%.
Additionally, in May, the central bank announced a $42.25 billion allocation to financial institutions, enabling them to provide loans to local state-owned enterprises for purchasing unsold completed apartments.
On Saturday, Ni Hong, China’s housing minister, remarked that the country’s property sector still has “great potential and room” for expansion, driven by ongoing urbanization and increasing demand for quality housing.
On Tuesday, BHP reported a 2% increase in its annual underlying profits, attributing the rise to “solid operational performance and higher commodity prices in key sectors.”
Despite some volatility in China’s steel demand, particularly due to the property sector’s struggles, Henry noted that other areas in China, such as infrastructure, shipping, and automobiles, continue to show healthy growth in steel demand.
BHP’s Australian shares closed 1.97% higher on Tuesday.
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