BHP Profit Surges 30% as Copper Overtakes Iron Ore

Market Commentary

South African Market Summary

The JSE strengthened on Monday, with the All Share gaining 0.54% to 114,672.93 points and the Top 40 rising 0.69% to 106,966.05. Investors are now awaiting July inflation data on Wednesday, with consensus expecting headline CPI to ease to 4.5% from June’s two-year high of 5.0%, when transport costs drove the acceleration. In corporate news, SPAR Group chairman Mike Bosman and deputy chair Shirley Zinn resigned with immediate effect, with Lwazi Koyana appointed interim chair. Regionally, South Africa assumed the SADC chairmanship with a focus on deeper trade integration amid weak growth, persistent trade barriers and declining industrialisation. President Cyril Ramaphosa also addressed recent anti-migrant tensions, stressing the need for greater regional inclusion and cooperation.

European Market Summary

European equities declined for a fourth consecutive session on Monday as the recent earnings-driven rally lost momentum and the US-Iran stand-off weighed on risk appetite. The STOXX 600 fell 0.22% to 656.41, with personal and household goods and food and beverages both declining 2.3%. Diageo dropped 3.4% following reports that it had agreed to reformulate certain products in India. In the UK, the FTSE 100 recorded a sixth straight decline as consumer-related shares weakened. Labour-market concerns also remained prominent after a CIPD survey showed subdued hiring intentions and confidence near historically weak levels, ahead of official employment data. Elsewhere, Ferrari sold a bespoke version of its first fully electric Luce model for US$40 million at auction.

US Market Summary

Wall Street ended lower on Monday as investors remained cautious ahead of quarterly results from major US retailers, which are expected to provide further evidence on consumer spending after weak July retail sales and employment data. All major S&P 500 sectors except energy declined, with communication services and consumer staples falling about 1.5%, while financials and consumer discretionary lost just over 1%. Microsoft and Meta Platforms were among the largest index drags, each retreating more than 3%. Semiconductor shares provided some support, with Micron Technology gaining 4% and Applied Materials advancing 5.5%. Attention now turns to Home Depot and Walmart earnings this week, while Nvidia’s results next week will provide another key test of investor confidence in the AI investment cycle.

Asian Market Summary

Australian consumer sentiment improved for a second consecutive month in August, with the Westpac-Melbourne Institute index rising 6.0% to 88.9 as mortgage holders became less concerned about further interest-rate increases. However, sentiment remained almost 10% below year-earlier levels. In China, new home prices fell 0.1% month on month in July, matching June’s decline and highlighting persistent weakness in housing demand. BHP reported better-than-expected full-year earnings and its highest annual dividend in four years, supported by record copper prices. Meanwhile, Japan’s 10-year government bond yield climbed to a three-decade high as overseas yields rose and expectations increased that the Bank of Japan could raise interest rates in the near term, adding to pressure across regional fixed-income markets.

Commodity Market Summary

Gold advanced for a third consecutive session on Tuesday as easing expectations for a near-term US interest rate increase supported demand, with investors awaiting minutes from the Federal Reserve’s latest meeting for further policy guidance. Oil prices also strengthened as prospects for an end to the Middle East conflict deteriorated, increasing concerns over energy supply. Iran signalled a shift towards a more offensive military posture after negotiations with the US stalled, while Washington ruled out extending a temporary ceasefire agreement. Meanwhile, China’s crude oil throughput fell 15.8% year on year in July, although processing increased from June for the first time since the conflict began. China has reduced crude processing and imports amid disrupted supplies and softer domestic demand, releasing additional barrels for other global buyers.

Currency Market Summary

The South African rand was steady on Monday as investors awaited domestic inflation data later this week for further insight into the economy. The US dollar remained near multi-month lows against major currencies on Tuesday as softer economic data reduced expectations of near-term Federal Reserve tightening. July retail sales declined for the first time in nine months, following unexpected job losses and relatively mild inflation readings. Markets now assign a 35% probability of a September Fed rate increase, down from 52.2% a week earlier. Geopolitical risks remain elevated, however, with the Strait of Hormuz effectively closed and US-Iran negotiations at an impasse. Meanwhile, the yen traded just below 160, with attention turning to a potential Bank of Japan rate increase next month.

Domestic Company News 

Thungela Resources Limited (TGA) +10.07%
Thungela Resources delivered stronger first-half 2026 results, with revenue rising 2% to R15.2 billion and profit increasing to R1.39 billion from R248 million. Headline earnings per share advanced 150% to 480 cents, while adjusted EBITDA rose 91% to R1.32 billion. Export saleable production increased 6% to 8.5Mt, supported by improved performance at Ensham, while export equity sales rose 7%. Adjusted operating free cash flow reached R1.89 billion, leaving the group with net cash of R6.1 billion at end-June. The board declared an interim dividend of R5.50 per share, up from R2.00 previously. Thungela reaffirmed its full-year production and cost guidance, supported by improving South African rail performance and continued operational execution.

RCL Foods Limited (RCL) -1.55%
RCL Foods expects headline earnings per share from total operations for the year ended June 2026 to decline 30%–35% to 101.6–109.4 cents, while EPS is forecast to fall 50%–55% to 81.0–90.1 cents. Underlying HEPS is expected to decrease 25%–30% to 102.3–109.6 cents. Performance was primarily affected by weaker profitability in Sugar, Royal Eswatini Sugar and Pet Food. Sugar faced increased deep-sea imports, lower local sales and weaker export pricing, while Pet Food volumes declined 20.5% following production disruptions and higher stock write-offs. EPS was additionally affected by impairment charges relating to Sunshine. Culinary and Baking delivered good performances despite volume pressure. Full-year results are scheduled for release on 31 August 2026.

South Ocean Holdings Limited (SOH) +25.00
South Ocean Holdings expects a significant improvement in earnings for the year ended 30 June 2026, with both earnings per share and headline earnings per share forecast at 8.02 cents. This represents a 186.1% increase from the loss of 9.31 cents per share reported in the corresponding prior period, marking a return to positive earnings. The trading statement was issued after the company established reasonable certainty that its financial performance would differ by at least 20% from the previous comparable period, as required under JSE Listings Requirements. South Ocean did not provide further details regarding the operational or financial factors responsible for the improvement in profitability. The financial information contained in the trading statement has not been reviewed or reported on by the company’s external auditors.

Global Company News

BHP Group Limited (BHP) +1.39%
BHP reported a 30% increase in full-year underlying attributable profit to US$13.20 billion, ahead of the US$12.66 billion consensus, supported by record copper prices. Copper and associated by-products generated US$18.19 billion in operating earnings, overtaking iron ore at US$14.53 billion as the group’s largest earnings contributor. BHP declared a final dividend of US$0.99 per share, taking the annual distribution to US$1.72, its highest in four years. Net debt declined to US$8.69 billion, below the group’s US$10–12 billion target range. Management expects copper demand to exceed 50 million tonnes annually by 2050 and said its project pipeline could increase copper production by up to 40% by 2035, reinforcing the commodity’s strategic importance.

Nvidia Corporation (NVDA) -0.07%
Nvidia has agreed to provide guarantees of up to US$105 billion supporting OpenAI’s lease of a large Ohio data centre being developed by SoftBank-owned SB Energy, while also investing US$1.5 billion in SB Energy. Nvidia will serve as the facility’s exclusive chip supplier, with initial capacity expected online in 2028 and potential total capacity reaching 8 gigawatts. CEO Jensen Huang said the site could generate as much as US$200 billion in Nvidia revenue, while supplying OpenAI with 16 gigawatts of computing capacity could contribute US$600 billion by 2030. The guarantee covers portions of lease and power obligations rather than the full project cost. SoftBank and SB Energy also plan substantial investment in new generation capacity and regional grid infrastructure.

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