“Impacts from the Covid-19 pandemic and other geopolitical and macroeconomic developments are expected to increase commodity price volatility. Volatility in the market will continue to translate into profit variability,” the mining giant said in its annual report for its 2020 financial year ended June 30.
This is mainly caused by a deterioration of demand from buyers in affected countries, supply disruptions from key producing regions or logistical constraints impacting supply chains.
BHP said price movements in minerals, oil and gas were especially affected.
“A $1-per-tonne decline in the average iron ore price would have an estimated impact of $163 million...