[Ferro-Alloys.com] Around 30pc of BHP's annual sales comes from exports to China. BHP is one of the world's largest exporters of iron ore and hard coking coal. It also ships thermal coal and copper.
Indications are that the US and Europe will see a more protracted period of activity disruption, a deeper labour market impact and a flatter trajectory for the recovery once it arrives, it said. India, Japan and South Korea will see negative impacts on industrial activity from their suppression efforts and those of their trading partners, the firm said.
"The arc of recovery will vary widely across countries," it said. Where "hibernation policies" have been enacted, a smoother resumption of activity is expected after the first wave than would otherwise have been the case, it said.
It is still uncertain whether traditional monetary and fiscal stimulus policies will have below-average or above-average multiplier effects, BHP said. A lower multiplier could result from depressed consumer and business confidence because of the damaging impact of Covid-19 on both jobs and profitability, it said.
A higher multiplier could occur if the lagged impact of stimulus coincides with a release of pent-up demand as economies wake from hibernation, with the important caveat that major second waves are averted, the firm said.
Each scenario is a plausible outcome for assessing where the global economy may be as calendar 2021 approaches, BHP said. (Argusmedia)
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