What's behind the rising BHP (ASX:BHP) share price today?

The BHP (ASX: BHP) share price is rising today. Could the higher price of copper be the reason for the lift?

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Shares in BHP Group Ltd (ASX: BHP) and other copper miners have lifted today, alongside rising prices in the red-gold metal.

At the close of trade today, the BHP share price was trading at $47.91, up 0.74%. Rio Tinto Limited (ASX: RIO) ended the day 1.31% higher at $122.74, OZ Minerals Limited (ASX: OZL) finished 0.41% higher at $24.38, and Sandfire Resources Ltd (ASX: SFR) closed 1.14% higher at $6.21.

In comparison, the S&P/ASX 200 Index (ASX: XJO) ended the day 0.2% lower.

Let's see what factors were driving copper prices – and the BHP share price – higher today.

Copper and BHP share price up

As of writing, copper prices are up 1.16% today to reach a 9-year high of US $4.389 per pound. In comparison, the price of gold is up 0.2% today.

The copper price has risen 8.47% in a month and 86.6% in the past year as demand for copper increases and supply falls. Analysts picked copper's record-breaking movement just last week.

While not solely focused on the much-used metal, BHP is still the largest copper extractor on the ASX by market capitalisation. Dramatic price movements of any commodity BHP has a material interest in, like copper, will likely affect the BHP share price.

Rising demand

As one of the most widely used metals in industry, copper tends to move in tandem with the global economy. It stands to reason then that as the COVID vaccine continues to be rolled out and expectations for an economic recovery grow, copper prices will continue to rise.

Another reason for copper's strong growth is the rising demand for renewable energy. Copper is essential, along with lithium and platinum group elements and demand for electric vehicles is expected to grow exponentially into the future. Furthermore, government and industry are increasingly aware of the risks of climate change to both the environment and the economy.

Falling supply

Rising demand is not the only reason for the squeeze on copper prices. Expectations are high that supply will be limited in the near term due to labour disputes in Chile, a major global producer of copper.

BHP operates mines in Chile, and thus the BHP share price could be affected by any fracas in the South American nation.

Reuters reports that Chilean mining unions and dock workers are threatening strike action because of a dispute over pensions. The government wants to limit the amount of money workers can draw from their pension funds to deal with economic hardships after the country was hit hard by the pandemic. 

BHP share price snapshot

Over the past 12 months, the BHP share price has increased 56.8%. It is only slightly down from its all-time high of $50.93 achieved in February this year.

BHP has a market capitalisation of $223.6 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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