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Eurostat data released Thursday showed that eurozone inflation surged further in April, driven by soaring energy costs, adding to the justification for a European Central Bank (ECB) interest rate hike, although modest underlying price growth data reduced the urgency of any action. The eurozones preliminary April CPI jumped to 3.0% year-on-year from 2.6% in the previous month, further exceeding the ECBs 2% target, with energy costs accounting for the vast majority of the increase. Meanwhile, core inflation, excluding volatile food and energy prices, slowed. Services inflation—a persistently high component of the price basket in recent years—slowed to 3.0% from 3.2%, while non-energy industrial inflation, a major drag on prices, rose to 0.8%. These figures are mixed for the ECB, which will likely keep interest rates unchanged at its meeting tonight, although it will signal an increasing likelihood of policy tightening. While high overall inflation data provides a reason for a rate hike, underlying data suggests that the initial energy shock has not yet produced a significant second-round effect.On April 30th, Eurostat released preliminary figures showing that the Eurozones first-quarter GDP grew by 0.1% quarter-on-quarter, below economists expectations of 0.2% and also lower than the previous quarters 0.2% growth. This is the first snapshot of economic activity since the outbreak of the conflict in Iran, indicating weak economic growth in the first quarter. As an energy-importing region, the Eurozone is considered one of the most vulnerable developed economies to disruptions in oil, gas, and other cargo transport from the Strait of Hormuz (since the end of February). A series of surveys released this week suggest that economic activity will slow further: business confidence is weakening, the service sector is deteriorating, profits are declining, exports remain impacted by tariffs, and banking signals indicate tightening credit conditions. This sluggish economic backdrop complicates the European Central Banks response to emerging, energy-driven inflation.Japanese Prime Minister Sanae Takaichi: It is expected that the supply of naphtha-derived chemical products will be secured from this year onwards.The Eurozones preliminary April CPI figure was 1%, below the expected 1.00% and the previous reading of 1.30%.Italys preliminary April CPI annual rate was 2.8%, below the expected 2.6% and the previous value of 1.70%.

COVID-19 has a negative impact on BHP's quarterly iron ore production

Charlie Brooks

Oct 19, 2022 14:19

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BHP Group announced on Wednesday that its quarterly iron ore production climbed due to improved performance from its Western Australian assets and an ongoing ramp-up at the South Flank project.


The increase in production happened despite an 18% fall in iron ore spot prices during the September quarter, due to China's "zero-COVID" policy, which impeded economic activity and iron ore demand by frequently shutting down multiple large cities.


Following a quarterly fall in iron ore exports, rival Rio Tinto (NYSE:RIO) cut its annual forecast for iron ore shipments.


During the September quarter, BHP's Western Australia projects had decreased COVID-19 impacts and outstanding supply chain performance, according to the company.


In recent quarters, mining businesses in Australia have suffered shortages of trained workers due to border restrictions and worker absenteeism resulting from COVID-19, which has had a negative effect on production.


The manpower shortage hindered production at its New South Wales coal facilities, which had already been impacted by flooding. New South Wales' energy coal production declined by 38% in the September quarter.


"We predict that global macroeconomic uncertainty will continue to affect supply chains, energy pricing, labor markets, and the availability of equipment and materials in the foreseeable future," said CEO Mike Henry.


The miner's iron ore output climbed by 2% to 72,1 million metric tons in the first quarter (mt). The organization met its annual output and expense projections.


BHP indicated that it intends to speed the production launch of its Jansen stage 1 potash project in Canada. The company expects to start production in 2026.

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