Investing.com– Shares of Australian mining giants BHP Group Ltd (ASX:) and Rio Tinto Ltd (ASX:) rose on Thursday after both companies reported strong production. market.
BHP’s Australian share was up 1.4%, trading just below its record high, while Rio Tinto shares rose 3% to a 10-month high.
BHP posted a record iron ore production for the six months ended December 31st. Miners also said China will become a “stabilizing force” for commodity demand in 2023 as it rolls back its strict zero-COVID policy.
Still, the world’s largest mining company experienced a significant drop in iron ore realized prices in the December quarter. However, this was also somewhat offset by significantly higher realized prices for thermal coal shipments amid rising energy demand around the world.
The December quarter for Rio Tinto, the world’s second largest miner. Miners have also flagged an upcoming increase in production as they incorporate their recently acquired Turquoise Hill property and ramp up production at their Australian site.
But miners have struck a more cautious tone toward China, warning of near-term risks to their workforce and supply chains as the country reopens from a three-year lockdown.
Still, given that China is one of the world’s largest importers of commodities, commodity markets are likely to see demand pick up as China reopens. Oil and copper prices recorded strong gains after the country reopened its borders earlier this month.
Members of the International Monetary Fund recently commented that a strong economic recovery could be seen as early as the second quarter of 2023.
But China is also grappling with the worst COVID-19 outbreak in history, raising uncertainty about the timing of a major recovery this year.