Sounding a cautious note for commodity markets, the world’s biggest miner forecast that any further deterioration in trading ties with the US could cut growth in China’s gross domestic product to below 6percent and deliver a blow to demand for raw materials.
Trade tensions are “actually putting a bit of a dampener on world economic growth and certainly the prospects for world economic growth,” chief executive Andrew Mackenzie said on a conference call. “Ultimately, if not yet, it will impact the demand for our products.”
Beyond the US and China dispute, there are also wider challenges to free trade that threaten to curb demand for commodities, according to Mackenzie.
“The more that governments think they can intervene in industry, threaten the independence of their banks, then the bigger risks that they are placing on broader global economic growth.”