China Developments Boost ASX Iron Ore Stocks
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China, the world’s largest consumer of iron ore, has announced taking measures aimed at addressing the overcapacity in its steel industry. The steps which include capping the steel sector’s expansion, are having a ripple effect. Anticipation of reduced crude steel supply has raised steel prices, creating an environment for iron ore prices to increase
BHP Group Limited (ASX: BHP)
had a very strong FY2025 with iron ore production hitting a record of 290 Mt from its Western Australia Iron Ore operations. This was driven by solid operations and strict use of capital. The company posted an underlying EBITDA of about US$26.0 billion with margins at 53%.Net operating cash flow came in at US$18.7 billion and underlying profit stood at US$10.2 billion but net debt went up to US$12.9 billion. BHP also paid around US$9.9 billion in taxes and royalties and gave out dividends of US$5.6 billion. For the future BHP is putting money into projects like the sixth car dumper due in FY28 along with Western Ridge Crusher in Q1 FY27 and Ministers North mine which could get FID in FY26.The balance sheet is solid and focus on decarbonisation plus a strong growth pipeline is likely to keep delivering long term value in iron ore and other areas.
Rio Tinto Limited (ASX: RIO)
showed solid numbers in 1H25 even though iron ore prices were weaker and weather problems hit operations. Revenue stayed flat compared to the previous year at around US$26.9 billion while underlying EBITDA was US$11.5 billion and NPAT was US$4.5 billion. Net operating cashflow came in at US$6.9 billion which helped pay a interim dividend of US$2.4 billion which came to 148 US cents per share and a 50% payout ratio. EBITDA for iron ore dropped 24% to US$6.7 billion cause of lower realised prices and less shipments but aluminium and copper did better with 50% and 69% EBITDA growth. Pilbara iron ore production hit 153.5 Mt with a strong recovery in Q2 but shipments of 150.6 Mt were still affected by cyclones. The balance sheet now has US$14.6 billion net debt after Arcadium Lithium deal. Main growth projects are ramp up at Simandou in Guinea, Western Range and Hope Downs 2 along with new lithium expansions. The company has given 2025 iron ore shipment guidance of 323–338 Mt.
Fortescue Metals Group Limited (ASX: FMG)
delivered a solid FY25 even though commodity prices were weaker, with record iron ore shipments of 198.4Mt which is 4% higher than FY24. Revenue dropped 15% to US$15.5 billion as hematite prices went down 18% to US$85/dmt and net profit after tax slipped 41% to US$3.4 billion. Underlying EBITDA was US$7.9 billion and cash flow from operations stood at US$6.5 billion while free cash flow reached US$2.6 billion. The company closed the year with US$4.3 billion in cash and net debt of US$1.1 billion. Costs stayed very competitive with hematite C1 costs at US$17.99/wmt maintaining its industry leading position. Iron Bridge ramp up added 7Mt shipments and is expected to reach 10–12Mt in FY26 and a nameplate of 22Mtpa by FY28. A final dividend of A$0.60 per share was paid which takes the total dividends for FY25 to A$1.10 which equates to 65% payout ratio. With new investments along with decarbonisation work and mine expansion the company is aiming for steady long term growth.
(Source: Company Announcements)
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