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Cailianshe News, August 27 (Editor: Liu Rui)BHP Billiton, the world's largest mining giant, released its latest financial report on Tuesday. BHP Billiton CEO Mike Henry said he expects China's real estate industry to rebound in the coming year with the support of Chinese government policies.

BHP also released an economic analysis report saying that it expects China's steel demand to grow healthily in industries other than real estate.

China's real estate market expected to pick up within a year

As the world's largest importer of iron ore, China's economic growth and steel demand prospects have a huge impact on the global iron ore market and are also an important factor affecting BHP Billiton's profit prospects.

BHP Billiton's financial report shows that in the last fiscal year ending June 30, BHP Billiton's basic profit was US$13.66 billion, slightly better than analysts' expectations of US$13.49 billion. BHP Billiton's basic profit for the fiscal year increased slightly by 2%, which the company attributed to "solid operating performance and rising prices of key commodities."

Henry admitted that the current cooling of China's real estate sector has become the "soft underbelly" of the steel demand outlook. He pointed out that China's steel demand has been under pressure from the real estate sector and there is still "some volatility." But he is optimistic about the series of measures recently announced by the Chinese government.

"The government has recently enacted policies aimed at supporting the real estate sector... We expect the real estate sector to potentially turn around in the coming year," Henry said.

China has introduced a number of support measures

In recent months, the Chinese government has introduced a number of major policies to support the real estate industry. In the first half of this year, restrictive policies such as purchase restrictions and sales restrictions were largely withdrawn. For the first time in more than a decade, the purchase restriction policy in Shanghai's real estate market has been substantially loosened. Currently, only a single digit of places in the country have implemented purchase restrictions. At the same time, down payment ratios and mortgage interest rates in various places have continued to decline.

In May this year, the People's Bank of China established a 300 billion yuan re-loan for affordable housing to support local state-owned enterprises in purchasing completed but unsold commercial housing at reasonable prices for use as allocated or rented affordable housing.

Last Saturday, China's Minister of Housing and Urban-Rural Development Ni Hong said that the real estate market still has great potential and room.

"At present, the supply and demand relationship in the real estate market has undergone major changes, and the market is still in a period of adjustment. With the implementation of various policies, positive changes have occurred in the market." Ni Hong said that judging from China's urbanization development process and people's new expectations for good houses, the real estate market still has great potential and space.

China's other industries are still developing healthily

Looking ahead, BHP Billiton CEO Henry believes that other industries in China - such as infrastructure, shipping and automobile industries - are still growing healthily, and these industries will also bring stable demand for steel.

“In the short term, we expect global commodity markets to remain volatile given the uneven recovery in China,” Henry said. “We expect developed economies to gradually recover from the persistent effects of rising interest rates over the next few years.”

BHP also released its economic and commodities outlook report on Tuesday. Lee Levkowitz, BHP's deputy head of market analysis and economic research, and others said in the report that the construction industry, which has traditionally accounted for the largest share of China's steel demand, is expected to fall to just over 20% this year, replaced by machinery and equipment.