BHP Billiton Ltd, the world’s biggest mining company, sees early signs that commodity markets are rebalancing, with oil and natural gas best placed to deliver gains into 2018.
“Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months,” BHP chief executive officer Andrew Mackenzie said yesterday in the company’s first-quarter production report.
“Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term,” he said.
BHP shares slumped 0.8 percent to close at A$22.47 (US$17.27) in Sydney trading, trimming its advance this year to 26 percent.
BHP joins Rio Tinto Group in expressing increased optimism on the outlook for commodities amid continued strong demand in China. Raw materials will probably see a broad-based recovery next year after an expected strong performance in the final quarter of this year on improving demand, according to Barclays PLC.
The Bloomberg Commodity Index has surged about 85 percent since it touched an almost 13-year low in January.
The iron ore price has gained 34 percent this year, while the oil price has advanced about 14 percent since OPEC last month agreed the outline of a deal that would cut production.
BHP’s full-year copper guidance of 1.66 million tonnes is under review following a two-week power cut in South Australia that has halted some output at its Olympic Dam mine, the company said.
Copper output in the three months ended on Sept. 30 declined 6 percent to miss estimates on lower grades at Chile’s Escondida, and amid both maintenance work and the power outage at Olympic Dam. Petroleum and iron ore output both beat analysts’ estimates.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
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INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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