The slowdown in global economic growth, especially the decline in China's demand for iron ore, has seriously hampered the growth of BHP Billiton, the iron ore giant.
The demand for commodities such as iron ore, copper and crude oil has been suppressed by the slowdown in the global economy. Last year, China's steel industry was experiencing difficulties and demand for imported iron ore was declining. This has exacerbated BHP Billiton's recent performance, which is closely related to emerging economies, especially China's economy. BHP Billiton reported a 14.1% drop in sales to $32.2 billion in the second half of 2012 and a net profit of $4.2 billion, down 57.8% from $9.9 billion in the same period a year ago, significantly below market expectations.
On the same day, BHP Billiton announced the decision to replace CEO. McKinsey, CEO of the company's former nonferrous metals department, will take CEO's baton from high Reiss. Analysts believe that BHP's appointment and dismissal was due not only to the frustration of Gorice's takeover of Rio Tinto, its main rival, during his tenure, but also to the company's declining performance.