BHP Group (ASX:BHP) expects continued demand for iron ore from Chinese steel makers as fears over a property slowdown in the Asian country will likely be offset by an increased appetite in new sectors, the Australian Financial Review reported on Monday, citing Chief Commercial Officer Rag Udd.

Udd said iron ore prices are expected to remain above $80 per tonne as China ramps up demand, particularly in machinery and electric vehicle manufacturing on the back of decarbonization efforts.

This comes as the Australian Department of Industry expects iron ore exports worth AU$117 billion at face value in the year to June. It also projects iron ore to average $85 a tonne, excluding the cost of freight, in 2025, the report said. S&P Global Platts pegged the cost of shipping iron ore from the Pilbara region to North Asia at $9.30 per tonne as of April 3, the report added.

However, Australia is facing competition from Rio Tinto (ASX:RIO) and Chinese-owned companies that are building mines in Africa's Guinea. Still, Udd sees a "pathway" to China's continuous demand as existing mines start to exhaust their supplies, according to the Australian Financial Review report.

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