© Reuters
By Ambar Warrick
Investing.com– Shares of Australian mining giants BHP Group Ltd (ASX:) and Rio Tinto Ltd (ASX:) rose on Thursday following strong production reports from both firms, as well as increased optimism over an economic recovery in China, their biggest market.
BHP’s Australian shares rose 1.4% and were trading just below a record high, while those of Rio Tinto jumped 3% to a 10-month high.
BHP posted , and logged record-high iron ore production in the six months to December 31. The miner also said that China will be a “stabilizing force” for commodity demand in 2023, as the country scales back its strict zero-COVID policies.
Still, the world’s largest miner saw a substantial drop in realized iron ore prices during the December quarter. But this was also somewhat offset by a large jump in the realized prices of thermal coal shipments, amid increasing energy demand across the globe.
Rio Tinto, the world’s second-largest miner, during the December quarter. The miner also flagged a coming increase in production, as it incorporates the recently-acquired Turquoise Hill assets and ramps up production in its Australian sites.
But the miner struck a more cautious tone over China, warning of near-term risks to labor and the supply chain as the country reopens from three years of lockdowns.
Still, commodity markets are set for a resurgence in demand with China’s reopening, given that the country is one of the world’s largest commodity importers. Oil and copper prices logged strong gains after the country reopened its international borders earlier this month.
Members of the International Monetary Fund recently opined that the country could see a strong economic recovery by as soon as the second quarter of 2023.
But China is also grappling with its worst yet COVID-19 outbreak, which has brewed some uncertainty over the timing of a bigger recovery this year.
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