Core Viewpoint - BHP Ltd has experienced a significant stock price increase of +7% following strong half-year earnings results, reflecting unusual volatility for the company during earnings season [1]. Financial Performance - BHP reported a revenue increase of +11% year-on-year to US$27.9 billion, with profit rising +28% to US$5.6 billion [3]. - The company's underlying earnings are approaching 60%, compared to around 50% the same time last year [3]. - BHP's market capitalization has reached A$273.6 billion, still below Commonwealth Bank's recent valuation of approximately A$300 billion [2]. Debt and Transactions - BHP's net debt has increased to US$14.7 billion, but this has not negatively impacted investor sentiment [4]. - The company announced a separate transaction related to its silver operations, which will provide an upfront payment exceeding US$4 billion, independent of the half-year results [4]. Market Dynamics - BHP is preparing for a future where China may no longer be its primary customer, as indicated by discussions of a plateau in Chinese steel production [5]. - The company has noted strong copper demand from China for calendar years 2025 and 2026, but India is increasingly mentioned as a key market, with growing iron ore demand [6]. - The frequency of the word "India" in BHP's reports has surpassed that of "China," indicating a shift in focus [6]. Challenges Ahead - BHP faces questions regarding the sustainability of its value proposition tied to China's economy, especially concerning iron ore, which remains a significant concern [7][8]. - Recent reports indicate a dramatic 80% collapse in exports of Jimblebar fines, a type of iron ore product, to China, highlighting potential issues in demand [9]. - There are indications that China's state-owned enterprises are seeking to reduce reliance on Australian iron ore, with ongoing price disputes affecting BHP's operations [10][11].