The third week of 2012 was marked by record making quarterly production reports from the major miners and energy producers, ahead of February's financial reporting season. Record iron ore production was a stand–out at the end of last year, raising hopes for record financials. Steel making fuels about about 40 per cent of BHP Billiton's earnings, about 60 per cent of Rio Tinto earnings and 100 per cent of Fortescue Metals Group's earnings.
The resources sector lost 25 per cent in 2011 and the latest 2012 forecasts for commodity hungry country China do not suggest a pick-up: Westpac's Global Head of Economics, Bill Evans, told the Finance News Network China's growth will slow to 7.5 per cent in 2012, down from the latest Chinese government figures of 8.9 per cent and the World Bank's downwardly revised forecast of 8.4 per cent.
Resources newsChina's economy grew at a faster pace than expected at the end of 2011, despite growing at the slowest rate in 2.5 years. China's National Bureau of Statistics has reported the world's second largest economy expanded at a rate of 8.9 per cent in the fourth quarter of 2011, slowing from a rate of 9.1 per cent the quarter before. In comparison America, the world's largest economy, grew by 1.8 per cent in the third quarter. Some analysts described the latest figures from China as proof of a ‘soft landing' scenario.
The World Bank has lowered its forecast for global growth by the greatest amount in three years. The Washington-based institution forecasts global growth will be 2.5 per cent in 2012 and 3.1 per cent in 2013, after growing 2.7 per cent in 2011. China is expected to expand 8.4 per cent this year, down from the bank's previous estimate of 9.2 per cent. The bank's chief economist Justin Lifu Lin says a likely global slowdown will impact China's export-driven economy but the nation is well positioned to stimulate its economy as it is one of the less indebted. "If China can maintain its growth, it's good for the world, providing support for commodities markets and growth in other countries," says Mr Lin.
Quarterly reportsBHP posts record H1 productionBHP Billiton Limited
(ASX:BHP) has posted record first half iron ore production from its West Australian mines and forecast full year output to come in above guidance of 159 million tonnes. The global miner's iron ore output jumped 23 per cent to 80.6 million tonnes in the six months to the end of December 2011. In the last three months of 2011 petroleum production increased 13 per cent, copper production gained 27 per cent, coking coal production fell 9 per cent and alumina production dipped 6 per cent.
Rio reports record Q4 outputRio Tinto Limited
(ASX:RIO) has recorded record fourth quarter iron ore output, bringing its full year production in line with guidance at 45 million tonnes (Mt) in the 2011 calendar year. Rio chief executive Tom Albanese says, "Production has bounced back from the severe weather conditions experienced in the first half, which had the biggest impact on Australian iron ore, coal and uranium.” The global miner has affirmed it is on track to expand its Pilbara operations to 283 Mt by 2013.
Woodside exceeds FY11 production targetWoodside Petroleum Limited
(ASX:WPL) has exceeded its revised production target for the full 2011 calendar year. The oil and gas producer posted total production of 64.6 million barrels of oil equivalent (MMboe) in a period that saw lower than expected cyclone activity and better than forecast facility reliability. One-off occurrences were blamed for an 11 per cent drop in annual production. Woodside has maintained its production target of between 73 - 81 million barrels of oil equivalent for the full 2012 year.
Santos meets FY11 output guidanceSantos Limited
(ASX:STO) has met its 2011 output guidance and maintained its 2012 production guidance. The energy producer's production fell 5 per cent from the year before to 47.2 MMboe. Santos attributed the decline to its sale of half of its stake in the Gladstone liquid natural gas project. In the same period sales fell 4 to 57.1 MMboe but revenue rose 14 per cent to $2.53 billion. Santos has maintained its 2012 production guidance of between 51 - 55 millions of barrels of oil equivalent.
CommoditiesFinance News Network asked Westpac Banking Corporation's
(ASX:WBC) Global Head of Economics, Bill Evans, for his global growth forecast, including his outlook on China and commodities:
“Overall I would expect that in the first half of this year [there will be] slower Chinese growth, slower demand for commodities and we [Westpac] expect the Australian dollar will weaken as a result... The lagged effect of the slowdown in China... will make the Australian dollar a little weaker which will certainly help some industries,” Mr Evans said.
Mr Evans forecasts China will grow at a 7.5 per cent pace in 2012, with strength weighed to the second half.
To watch the full interview with Bill Evans, click
here.
