While BHP says its decision to cut 750 jobs is because of the Queensland government’s coal royalties being too high, there is another part of the story.<\/p>\n
The “big picture” is that coal prices have fallen sharply this year (down by more than 30%).<\/p>\n
It’s because demand from Australia’s biggest trading partner, China, is on the way down. So that would also have a sizeable impact on BHP’s coal revenue.<\/p>\n
Commonwealth Bank commodity analyst Vivek Dhar published an interesting research note on China’s coal purchases a few weeks ago.<\/p>\n
He pointed out China’s coking coal imports have dropped by around 11% in the year to July (and they’re down 8% in the first seven months of the year).<\/p>\n
It’s also worth noting the world’s second-largest economy is producing less steel (so not as much need for coking coal from miners like BHP).<\/p>\n
“With China accounting for [around] 33% of world\u2019s coking coal imports, the fall in China\u2019s coking coal imports is a key source of downward pressure on coking coal prices,” Mr Dhar wrote in his note.<\/p>\n
“Both demand and supply factors have weighed on China\u2019s coking coal imports.<\/p>\n
“On the demand side, the 3.1%\/yr fall in China\u2019s crude steel output has reduced China\u2019s need for coking coal.<\/p>\n
“Policy has played a significant role in reducing China\u2019s steel output so far this year. In March, China’s National Development and Reform Commission (NDRC) had announced for the first time a proposal to cut steel production in its draft plans.<\/p>\n
“Since China’s Central Financial and Economic Affairs Commission, which is chaired by President Xi Jinping, met on 1 July 2025, a push to reduce ‘disorderly’ low price competition (also referred to as \u2018anti\u2011involution\u2019) and phase out outdated industrial capacity has begun in earnest.<\/p>\n
“We expect China\u2019s steel demand will deteriorate through H2 2025 as payback for frontloading industrial output and exports in H1 2025 to get ahead of higher US tariffs.<\/p>\n
“Despite ongoing headwinds to China\u2019s steel demand, we still believe China\u2019s steel output cuts will be a more dominant driver of lower steel production in China.<\/p>\n
“Our view that policymakers will announce stimulus in late Q3 or early Q4 to ensure China\u2019s economy reaches its growth target of \u2018around 5%\u2019 this year should give a boost to China\u2019s steel demand.”<\/p>\n","protected":false},"excerpt":{"rendered":"While BHP says its decision to cut 750 jobs is because of the Queensland government’s coal royalties being…\n","protected":false},"author":2,"featured_media":33981,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[11120,25725,45,49,48,10656,3237,3242,100,166,3241,14503,7554,25726,6495],"class_list":["post-149460","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-asx","tag-aud","tag-business","tag-ca","tag-canada","tag-dollar","tag-dow-jones","tag-gold","tag-markets","tag-nasdaq","tag-oil","tag-sp","tag-sp-500","tag-usd","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=149460"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149460\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/33981"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=149460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=149460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=149460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}