Australian (ASX) Stock Market Forum

BHP - BHP Group

Jump to new
IMHO, most shares & especially resource shares are on the way down in coming weeks.

Most of the news coming out about the world economy is bad. Very bad. And before anyone says "oh, but it's priced in" I don't accept this is correct, because most of the news appears materially worse than "estimates".

Despite all the bad news, BHP (other than today) has had a stellar rise in recent days.

Sooner or later something's gotta give.....
 
BHP are looking good now with the LSE affect, viz a viz the tanking of the £ v A$ in the last 10 days, and strength in the ADR's.
 
Just be careful that BHP in Aus doesnt have to match the BHP Blt plc in london despite its dual listing. Aus one has always been higher after currency conversion.
US ADRs match well though.
Looks like a big day ahead.

Cheers
 
Just curious on what people's thoughts are on the fact that BHP are yet to announce any productions cuts. RIO and Vale have announced cuts along with a lot of other players, yet BHP remain silent.

Is this an attempt not to spook the market, or do they see themselves as being in a better position somehow? I don't see how, but those announcements of production cuts and expansion revision must surely come soon?
 
frenzel said:
Just curious on what people's thoughts are on the fact that BHP are yet to announce any productions cuts.
Click to expand...
I think they eventually will at a guess, unless the current trend turns around which is hard to see in the very short term.

They've already put back OD expansion.
 
kennas said:
I think they eventually will at a guess, unless the current trend turns around which is hard to see in the very short term.

They've already put back OD expansion.
Click to expand...

Surely if they dont have any production cuts they will have to accept lower prices for their negotiated contracts, and are already getting lower prices for their spot market stuff.
 
prawn_86 said:
Surely if they dont have any production cuts they will have to accept lower prices for their negotiated contracts, and are already getting lower prices for their spot market stuff.
Click to expand...

Hi, This policy could weaken smaller miners and put some out of business quite quickly, or tank their share price towards zero. BHP can then pickup any bits they want for very little.
 
Surely the cost of producing will not decrease as demand picks up, again as it always will. So getting a heafty stockpile from there current plants would be a smart move by them.

They may however cut back expansion focusing only on high demand products with high returns. Aslong as BHP can continue to provide high grade products they will be able to take more and more of the market pushing the others Eg Vale and RIO out of theirs.

They were expecting 25bil profit this year even if that is cut in half of this years its still 7bil.
 
china has started to come off in a big way, how can you believe the numbers they throw at us, if things are still all rosy why are they doing a 800 billion stimulus package?
 
Pairs Trader said:
china has started to come off in a big way, how can you believe the numbers they throw at us, if things are still all rosy why are they doing a 800 billion stimulus package?
Click to expand...

The theory seems to be that they need this abnormally high ( to us ) growth rate at this stage of their urbanisation/industrialisation if they are to avoid social dislocation/unrest. ( Sorry about the big ....ion words ! )

I don't, for a minute, believe all the numbers that get thrown around; witness the "denial by numbers" indulged in by the USA on their inflation figure until recently!

:rolleyes:
 
http://www.news.com.au/business/story/0,23636,24655478-14334,00.html

uh uh :eek:
BHP Billiton has admitted it is facing first-half iron ore sales losses of up to $US600 million ($920 million), ... spot market despite prices falling well below $US100-a-tonne ... as low as $US63.50 ... etc

BHP Billiton expects $920m in iron ore losses
By Matt Chambers
The Australian
November 15, 2008 12:00am

BHP Billiton has admitted it is facing first-half iron ore sales losses of up to $US600 million ($920 million), finally falling in with Rio Tinto and Vale, as Chinese steel mills struggle to make contracted purchases in a slowing economy.
The global financial crisis had also become much worse than most people thought and was expected to weigh on commodities demand for up to two years, BHP's chief commercial officer, Alberto Calderon, said yesterday.

Speaking to The Weekend Australian from London, Mr Calderon confirmed that credit issues had led some steel mills to ask for shipment deferrals and that this would reduce iron ore sales by up to 6 million tonnes by the end of the year.

The comments are the first public acknowledgement from BHP that it will have to join its $US90 billion takeover target Rio and Brazilian giant Vale in pulling back iron ore sales as Chinese demand plummets.

Rio last week said it would drop both its 2008 sales target and annual production rate by 20 million tonnes, leading analysts to cut full-year profit forecasts by up to $US1 billion.

Mr Calderon stressed BHP would not be cutting production and that the only reason the extra shipments would not be sold this year was that it would take time to sell them on to spot markets.

BHP has been selling iron ore on to the spot market despite prices falling well below $US100-a-tonne annual contract prices.

etc
Click to expand...
In recent weeks. BHP sold several capesize shiploads on to the spot market, where prices are at $US69 a tonne after falling as low as $US63.50 at the end of October.
Click to expand...
 
Steel mills defer BHP shipments

BHP BILLITON has admitted its iron ore shipments could fall by as much as 28 per cent during the final two months of the year because difficulties in obtaining credit has forced some steel mills to postpone deliveries.

Sydney Morning Herald - 17/11/2008

BHP BILLITON has admitted its iron ore shipments could fall by as much as 28 per cent during the final two months of the year because difficulties in obtaining credit has forced some steel mills to postpone deliveries.

The admission - yet to be announced to the market - lays to rest BHP's insistence last week that its iron ore division was operating as normal even though rivals like Vale, Rio Tinto and Fortescue Metals have announced reductions in their ore production.

A BHP spokeswoman, Samantha Evans, said the miner still had no plans to cut production, but up to 6 million tonnes of shipments - worth $US600 million ($926 million) at benchmark prices - could be postponed until next year following feedback from customers.

She said BHP would attempt to sell the production into the spot market, which is trading at a 40 per cent discount to the benchmark price, but would not be drawn on the issue of further sales cutbacks if the market remained soft.

There are concerns in the industry that BHP's continued selling into the spot market at discount prices will serve to lower the benchmark price of iron ore - and therefore Australia's export and corporate tax revenues - even further next year.

But BHP is in a tough position, since it is seeking European Commission approval for its bid for Rio amid concerns about the combined company's dominance of the iron ore market.

At an investor briefing in London on Friday, Vale's chief financial officer, Fabio Barbosa, launched a thinly veiled attack on BHP for its lack of disclosure on iron ore sales in recent weeks.

"We cannot escape the reality. We must face it," he said. "We have been very, very transparent, as is our approach, and conveyed to markets our views about what is going on. In terms of production, we were the first leading company to announce a cutback in production because we most clearly understood the state of the market."

Frank Zhang, a representative of BHP's shipping agent, Wilhelmsen Ship Services in Port Hedland, told the Herald last week his company expected fewer ships to be chartered in coming weeks and noted loading of some ships had already been stalled while waiting for letters of credit.

Last week the miner cited several operational issues rather than lack of demand as the reason for lower shipments, even though the Herald reported the Port Hedland Port Authority website showed BHP was poised to make about 40 shipments this month, down from 60 in recent months.

But when an interview with BHP's chief commercial officer, Alberto Calderon, in which he disclosed a revised sales outlook, was published on the internet early on Saturday morning, the miner's shares reversed earlier gains in London trading to close 21.5 pence lower at #9.05 ($20.75).

Ms Evans insisted the information was not price-sensitive and therefore did not need to be announced to the market in the same transparent manner as the cutbacks by Vale, Rio and Fortescue had been conveyed.

"We didn't see it as worthy of announcing it," she said.

BHP's board is expected to decide this month whether to proceed with a $US6.1 billion expansion to its iron ore production capacity. Chinese iron ore demand has not rebounded since the Chinese Government announced a $US586 billion stimulus package involving railway last week, but there are signs the market is stabilising.

"The railway package has helped recharge expectations about the future," Mr Barbosa said. "The first impression . . . is the deterioration has stopped, but we still have some issues to deal with [like less steel demand from the automotive sector]."

There are concerns that Japanese steel makers - which account for about a quarter of Australian iron ore purchases - are poised to make production cuts which could exacerbate the weak global demand.
 
So sub $22 early next week may not be unrealistic after all.

Its down just over 1% in the UK at the moment but is on the way back up.

(click to expand)
 

Attachments

  • BHP 171108.png
    BHP 171108.png
    9.5 KB · Views: 11
what happened here ...................................................................................................
 

Attachments

  • bhp.JPG
    bhp.JPG
    53.6 KB · Views: 11
I saw similar activity on Origin Energy and a few others.

Judging by the sale codes

XT - Crossed trade
SX - Portfolio special crossing
OS - Overseas
 
SenTineL said:
what happened here ...................................................................................................
Click to expand...

Look at the time & the status.

It is only the closing auction. Pretty sure there is a sticky in the beginners lounge on the subject of opening and closing auctions.
 
The Big Australian not holding above $24 looks untidy.

We either bounce from this 3400 XAO / $24 zone or it's another leg down maybe.
 

Attachments

  • BHP.gif
    BHP.gif
    28 KB · Views: 9
BHP:-

Even thouugh BHP is currently supported around it's 4th Quarter lows...

The expectation once price moved below 34:45 in the last Week of September, was to continue down into $18:00.

Current price action:- November 50% level rejection pattern looking to continue down into November's lows, and I'd would say probably
complete the $18:00 move some time in December if not sooner.

That's the only conclusion I can see by looking at the current price action
on resources.
 

Attachments

  • bhp11-19.gif
    bhp11-19.gif
    20.9 KB · Views: 8
Opening up under $22....cripes!

I thought under $25 was a buy.

I've underestimated the power of this drive down.

:eek:
 
Top