Iron Ore Rises on Improved Sentiment — Market Talk

Gold held its recent decline below $3,340 per ounce on Friday, on track for its first weekly decline in three, as strong US economic data reduced the urgency for the Fed to cut interest rates.

Retail sales rebounded more than expected in June, while weekly initial jobless claims unexpectedly fell to a three-month low—both signaling resilience in the economy despite the impact of tariffs.

Reflecting this strength, Fed Governor Adriana Kugler said it would be appropriate to keep rates steady for some time.

However, San Francisco Fed President Mary Daly maintained her outlook for two rate cuts this year.

Nevertheless, safe-haven demand for gold was supported by ongoing trade uncertainties, with President Trump recently announcing plans to notify over 150 trade partners of their tariff rates.

Geopolitical tensions, including the escalating Russia-Ukraine conflict and unrest in the Middle East, further enhanced gold’s appeal as a safety asset.

BHP Group, the largest miner by market value globally, on Friday reported record annual iron ore and copper production, including a 17-year high in output from Escondida, the world's largest copper mine. Here are some comments from BHP's fourth-quarter result.

On copper output:

"Total copper production increased for a third consecutive year, a 28% increase from FY22, to a record 2.017 [million metric tons]. Copper production for FY26 is expected to be between 1.800 million and 2.000 million, reflecting planned lower grade in Chile."

On Escondida mine:

"Escondida achieved its highest production in 17 years, increasing 16% due to record concentrator throughput, improved recoveries, higher concentrator feed grade of 1.02% (FY24: 0.88%) and the Full SaL leaching project which achieved first production in Q4 FY25."

On Copper South Australia:

"Copper South Australia performed strongly across all three operations following the outage, delivering an 18% uplift in copper production in H2. The smelter and refinery demonstrated continued operating stability and performance improvement, achieving record half-year copper production at Olympic Dam (under BHP ownership) and record full year concentrate smelted.

On iron ore output:

"Iron ore production increased to a record 263 million tons. Production for FY26 is expected to increase to between 258 million and 269 million tons."

On Australian iron-ore operations:

"WAIO delivered another full year production record of 257 million tons (290 million tons on a 100% basis) and record shipments. This strong performance reflects supply chain excellence with record productive movement, in addition to improved rail cycle times, and enhanced car dumper and ship loader performance unlocked by the Port Debottlenecking Project 1."

On steelmaking coal mines:

"Production increased 5% (excluding the contribution of Blackwater and Daunia in FY24), and raw coal inventory levels increased 12%. The strong performance was underpinned by improved truck productivity and led to increased production across all open cut mines."

On nickel business:

"Western Australia Nickel (WAN) transitioned into temporary suspension in HY25. As previously announced, BHP intends to review the decision to temporarily suspend WAN by February 2027. As part of this review, BHP is assessing the potential divestment of the WAN assets. Any decision to divest will be subject to an assessment against other options, including continuing temporary suspension, restart or closure."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

By Rhiannon Hoyle

Mining giant BHP Group flagged rising costs and delays at a giant potash project in Canada and said it may sell its Australian nickel operations, as it reported record annual iron ore and copper production.

Australia-based BHP, the world's biggest miner by market value, has been reshaping its business to bet on an accelerating energy transition and global population growth via investments in copper and potash, a fertilizer ingredient. The miner currently relies on the steel ingredient iron ore for more than half its earnings.

The company said Friday it faces rising costs at the Jansen potash project in Canada's Saskatchewan province, its only major development currently under construction.

The miner now expects the first stage of the project will cost between $7.0 billion and $7.4 billion to build, up from $5.7 billion previously. It may also return to an earlier target for first output around mid-2027, instead of its most recent goal of achieving production by the end of next calendar year.

BHP reported that stage of the project is 68% complete. It said its estimates are currently under review and it would provide investors with a firm view on timing and costs later.

The company said it is also reviewing Jansen's second stage, which is roughly 11% complete. BHP may delay first production from that expansion by two years, to fiscal 2031, because it reckons there might be more potash supply coming into the market over the medium term than previously envisaged.

"The fundamental outlook for potash is very challenging, in our view," Jefferies analysts said in a note.

BHP placed big bets on demand for potash as it pulled back on other investments, including in coal and nickel.

The miner last year shuttered its unprofitable Australian nickel operations due to a global glut of the metal, caused by a sharp rise in supply from operations in Indonesia.

BHP, which intends to review that decision by early 2027, on Friday said it is also assessing whether to sell the nickel business. "Any decision to divest will be subject to an assessment against other options, including continuing temporary suspension, restart or closure," BHP said in its quarterly report.

BHP had considered a sale of the operations known as Nickel West as recently as 2019, but chose to retain them as expectations of a battery boom intensified.

In the quarterly report, BHP recorded iron-ore production of 263.0 million metric tons for the 12 months through June, up 1% on the year earlier.

The result beat market expectations, with analysts having forecast annual output around 260.8 million tons, according to a consensus compiled by Visible Alpha. The company had guided to output between 255 million and 265.5 million tons.

The miner has been gradually lifting iron-ore output from pits in remote northwest Australia, where it reported record annual production and shipments. BHP said it expects to produce between 258 million and 269 million tons of iron ore in the coming year.

In its copper business, the second biggest contributor to BHP's earnings, the miner reported full-year production of around 2.017 million tons, up 8% year over year. The company had projected annual copper output of between 1.845 million and 2.045 million tons.

BHP said it expects to produce between 1.8 million and 2.0 million tons of copper in the year ahead.

The company has been producing more copper in Chile, where mining at the giant Escondida operation, it runs in the Atacama Desert, shifted into areas of higher-grade ore. Escondida--the world's top source of copper concentrates and cathodes, used in home appliances, power grids, and cars--achieved its highest output in 17 years, BHP said.

Chief Executive Mike Henry said global commodity demand has been resilient in 2025 so far. "That resilience largely reflects China's ongoing ability to grow its overall export base despite a significant decline in exports to the USA, and its ability to deliver robust domestic demand despite the dislocation in the property sector," he said.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

RBC Capital Markets sees BHP's "strong" 4Q operational and cashflow performance as the focus of its latest result. That is giving tailwinds to the stock, which is up 2.3% at A$40.02. RBC highlights a 4Q beat on production and FY26 guidance in line with expectations. One-off disclosures are generally positive, although 4Q pricing is mixed, RBC says. The operational result is partially offset by the Jansen stage one capex increase and delay, the broker says. RBC has a sector perform rating and A$44.00 target on BHP. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

Higher costs at BHP's Jansen potash project offset a strong operational performance, Jefferies analysts say following the miner's 4Q production results. The analysts say the "blowout at Jansen is the clear negative" and that "the fundamental outlook for potash is very challenging, in our view." BHP's 4Q production results are strong, however, they say. "All things considered, we believe the risk/reward tradeoff in BHP is balanced for now." Jefferies reiterates a hold rating on BHP. The stock is up 2.5% at A$40.10. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

Brent crude oil futures hovered around $69.6 per barrel on Friday, holding a 1.5% gain from the previous session, supported by prospects of tighter supply and an improved demand outlook.

Drone attacks in Iraq’s Kurdistan region cut output by up to 150,000 bpd, while ongoing regional instability and Israeli strikes in Syria added to market jitters.

In broader markets, strong US economic data eased growth concerns despite trade tensions, while better-than-expected Chinese GDP figures improved the demand outlook from key consumers.

Reinforcing this view, US crude inventories dropped sharply last week, consistent with the IEA’s observation that rising output has not led to higher stockpiles, indicating firm demand.

Still, oil is heading for a weekly loss of more than 1%, the first in three, after President Trump gave Russia a 50-day deadline to agree to a ceasefire earlier in the week, easing fears that fresh sanctions could disrupt global crude supplies.