BHP posts record iron ore volumes as pricing pressure and rising capex temper outlook

South African Market Summary

South African equities were little changed, with the All-Share Index easing 0.04% to close at 120,116.38 points, while the Top 40 Index edged 0.01% higher to 112,280.01 points, as gains in resources offset weakness in industrials. Market focus now shifts to domestic consumer inflation data, which will shape near-term monetary policy expectations and interest-rate sensitivity across asset classes. Politically, sentiment remains fragile as scrutiny intensifies over Iran’s participation in naval exercises off Cape Town, further straining relations with the US. A board of inquiry into possible military insubordination introduces additional political risk, with potential implications for defence leadership and South Africa’s diplomatic positioning.

European Market Summary

European equities suffered their sharpest daily decline in two months as tariff risk resurfaced, with the STOXX 600 falling 1.2% amid renewed trade tensions with the US. Export-heavy markets bore the brunt, with Germany’s DAX and France’s CAC 40 each down more than 1.3%, after President Donald Trump threatened additional tariffs of up to 25% on goods from several European countries if negotiations over Greenland-related access fail. The move revived concerns over trade-policy volatility and the durability of existing US-EU agreements. Stock-specific moves stood out, with Beazley surging on takeover news and Bayer rallying on favourable US legal developments.

American Market Summary

US markets were closed in observance of the Martin Luther King Jr. Day public holiday.

Asian Market Summary

Asia-Pacific markets were mostly lower as investors weighed renewed US tariff threats linked to Greenland, reviving concerns over escalating trade tensions with Europe. In China, policymakers kept benchmark lending rates unchanged for an eighth consecutive month, with the one-year and five-year loan prime rates held steady in line with expectations, underscoring a cautious policy stance amid uneven growth. South Korea’s economy slowed sharply in the final quarter of 2025 as weak domestic demand and investment offset resilient exports. In Japan, attention turns to the Bank of Japan, which is expected to lift its growth outlook and maintain a tightening bias, although political uncertainty and rising bond yields complicate the timing of further rate hikes.

Currency Market Summary

The South African rand traded cautiously as global risk appetite softened amid heightened geopolitical tensions, while investors awaited domestic inflation data for guidance on the South African Reserve Bank’s rate path. Globally, the US dollar weakened, with the dollar index easing 0.1% to 99.004, its lowest level in a week, as renewed tariff threats against European allies revived concerns over US policy uncertainty. The move triggered a renewed “Sell America” trade, weighing on US equities, Treasuries and the currency simultaneously. US markets were closed on Monday for the Martin Luther King Jr. Day holiday and are set to reopen with sentiment fragile.

Commodity Market Summary

Oil prices edged higher as stronger-than-expected Chinese growth data improved demand sentiment, while geopolitical risk remained elevated amid renewed US tariff threats against Europe and uncertainty around Venezuela’s oil sector. Reports that Vitol is offering discounted Venezuelan crude to Chinese buyers, alongside increased Chinese imports of Russian Urals crude ahead of tighter EU restrictions, highlighted ongoing dislocations in global energy trade flows. Precious metals strengthened further, with gold and silver trading near record highs as escalating tariff rhetoric and Greenland-related tensions drove safe-haven demand and reinforced defensive positioning across commodity markets.

Sibanye-Stillwater Limited (SSW) +2.81%

Sibanye-Stillwater provided an update on its Keliber lithium project in Finland, confirming construction and cold commissioning remain on track for completion in Q1 2026, with total capital investment estimated at approximately €783 million. Following a comprehensive review, the Group and partner Finnish Minerals Group agreed to a staged start-up, initially prioritising mining and concentrating activities while deferring refinery commissioning to manage ramp-up risk and preserve capital flexibility amid weak lithium prices. The EU-classified strategic project remains positioned to supply battery-grade lithium into European value chains over the long term.

Truworths International Limited (TRU) 0.00%

Truworths announced that clients of Allan Gray Proprietary Limited have acquired a beneficial interest in the company’s securities, resulting in Allan Gray holding 5.2542% of the issued ordinary shares on behalf of its clients. The disclosure was made in line with section 122 of the Companies Act and the JSE Listings Requirements. Truworths confirmed that the requisite regulatory filings will be submitted to the Takeover Regulation Panel and the Companies and Intellectual Property Commission. The transaction signals increased institutional shareholding, although it does not imply any change in control or strategy at this stage.

Alphamin Resources Corporation (APH) +1.43%

Alphamin reported record FY2025 tin production of 18,576 tonnes, representing a 7% year-on-year increase, with Q4 output of 5,008 tonnes broadly stable versus the prior quarter. FY2025 EBITDA guidance was set at US$341 million, up an estimated 25% on FY2024, supported by strong tin prices, while Q4 EBITDA guidance of US$108 million reflects continued operational leverage. For FY2026, the company guided to contained tin production of approximately 20,000 tonnes. Progress continues on exploration initiatives, alongside announced senior management transitions, including the retirement of the CEO and the appointment of a new CEO and CFO.

BHP Group Limited (BHP) -0.49%

BHP reported record first-half iron ore production of 146.6 million tonnes but acknowledged lower realised prices on some iron ore shipments as negotiations continue with China Mineral Resources Group on 2026 supply terms. While volumes beat consensus and full-year guidance was maintained, pricing pressure highlights evolving dynamics with China’s state buyer. The group also flagged a 20% increase in capital costs for its Jansen Stage 1 potash project, now estimated at US$8.4 billion. Copper production guidance was modestly upgraded on strong operational performance, while coking coal output is expected to trend towards the lower end of forecasts due to geotechnical challenges.

OpenAI (Not Listed)

OpenAI disclosed that annualised revenue surpassed US$20 billion in 2025, up from US$6 billion in 2024, with growth closely linked to a sharp expansion in computing capacity to 1.9 GW. Management highlighted record weekly and daily active users and confirmed the introduction of advertising within ChatGPT for selected US users to support rising development costs. Looking ahead, OpenAI plans to prioritise agent-based automation and workflow tools, alongside practical adoption across health, science and enterprise. The company expects to unveil its first hardware device in the second half of 2026, while maintaining a capital-light, partnership-driven balance sheet strategy.

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