The BHP (ASX:BHP) share price is up 8% in the past month. Here's why

The BHP share price is both tumbling and rallying in recent weeks amid volatility in the broader market.

| More on:
Rumble share price A satisfield miner stands in front of a drilling rig, indicating a share price rise in ASX mining companies

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

The BHP Group Ltd (ASX: BHP) share price has rallied 8% in the past month, bouncing off a 2-month low of $45.61 on 21 June to trade at $50.19 early Wednesday morning.

Shares in the iron ore major continue to move in a volatile fashion, sliding to short-term lows before quickly bouncing back to all-time highs.

BHP share price tumbles despite upbeat quarterly update

Looking at the recent performance of the iron ore major, the BHP share price has tumbled 5.07% this week after a record close of $51.87 on Friday.

This weakness was overshadowed by a sharp selloff in the broader market, with major indices such as the Dow Jones Industrial Average and S&P/ASX 200 Index (ASX: XJO) sliding a respective 2.99% and 1.31% during Monday and Tuesday trading sessions.

The US market has faltered under increasing concerns of a resurgence in COVID-19 cases and the delta variant.

Despite a disappointing week on the ASX so far, BHP has released its fair share of positive news.

On Tuesday, the company released its fourth-quarter and full-year update, citing production that was in line with guidance and strong pricing for its commodities.

Overall, BHP CEO Mike Henry said the company was "in great shape".

Our operations are performing well, we continue our track record of disciplined capital allocation, and our portfolio is positively leveraged to the megatrends of decarbonisation, electrification and population growth.

Iron ore prices hold up despite weak outlook

Looking ahead for the BHP share price, there are consensus expectations that iron ore prices will weaken in the medium to long term.

A June quarterly report from the Australian Government's commodity forecaster, Office of the Chief Economist (OCE) said that:

Prices are forecast to average around US$150 a tonne in 2021, before falling to below US$100 a tonne by the end of 2022, as Brazilian supply recovers and Chinese steel production softens

The last time iron ore was trading at US$100 a tonne was back in June 2020 when BHP shares were fetching around $35 a share.

Despite increasing expectations of moderating prices, iron ore has remained well above the US$200 level.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

More on Resources Shares

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

Is the Fortescue share price a buy for passive income?

Let’s dig into the potential of this mining giant.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Major miners fall as iron ore prices continue to sink

Waning Chinese demand and oversupply concerns push iron ore prices lower.   

Read more »

A mining worker clenches his fists celebrating success at sunset in the mine.
Resources Shares

Would I buy Pilbara Minerals shares?

Are investors missing an opportunity with this lithium stock?

Read more »

Three miners looking at a tablet.
Resources Shares

Here's the earnings forecast out to 2029 for BHP shares

Let’s dig into the predictions.

Read more »

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Two mining workers in orange high vis vests walk and talk at a mining site.
Resources Shares

ASX All Ords mining stock sinks on US silver acquisitions

Investors are bidding down the ASX All Ords miner on US acquisition news. But why?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

How these 2 tailwinds could boost the BHP share price into 2026

A leading expert forecasts that BHP shares are set to recover. But why?

Read more »