China’s economic struggles have claimed a new victim: BHP Billiton Ltd (NYSE:BHP), which reported a 52% drop in full-year profit due, in part, to falling commodity prices, and has thus reduced its long-term forecasts for steel production in the Far East nation.
China also happens to be BHP Billiton’s largest customer and buyer of metals and energy, but with the yuan devalued, economic instability and supply gluts forecasting the slowest growth for the nation in more than 25 years, mining companies are bound to take a hit.
“The changes that we see in China at the moment are things that we’ve foreseen for several years,” Andrew Mackenzie, CEO, BHP, told Bloomberg Business. “China’s rate of growth would slow, but we still think it will be 7 percent this year.”
The company said in a statement that crude steel production in China will fall to between 935 million metric tons and 985 mmt over the next 10 or so years.
Global steel news: Indian companies affected by Asian imports
Meanwhile, in India, steel companies are asking their government for safeguards to protect domestic organization from the deluge of lower-cost imports from South Korea, Japan and China.
We reported last week that state-owned Steel Authority of India Ltd. (NSE:SAIL) and several private steel makers, including Tata Steel (NSE:TISC), have jointly filed a petition with the Director General of Safeguards (DGS) requesting to undertake those safeguard duties.
Safeguards are measures implemented specifically to protect local organizations that surpass the measures from anti-dumping and countervailing as designated by the World Trade Organization.