The BHP Group Ltd (ASX: BHP) share price has dropped around 7% in just two weeks.
It has been a volatile time for many ASX shares. Yet, over the last two weeks, the S&P/ASX 200 Index (ASX: XJO) has actually risen by more than 3%. That implies an underperformance compared to the index of around 10%.
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Commodity volatility
At the moment, there are quite a few commodities in the BHP portfolio, including copper, iron ore, petroleum and nickel.
However, BHP is planning to divest its petroleum business to Woodside Petroleum Limited (ASX: WPL). At that time, BHP shareholders will receive Woodside shares. In fact, 52% of Woodside shareholders will own the expanded Woodside, while BHP shareholders will own the remaining 48%. But for now, BHP still owns the whole business.
After a rapid climb of the oil price amid the Russian invasion of Ukraine, it has dropped back to under US$110 per barrel.
What's next for the BHP share price?
The company is scheduled to pay its interim dividend next week.
It recently completed the unification of its UK and Australian businesses, under the Australian company. According to BHP, this will make corporate action easier, such as divestments or acquisitions.
BHP is expecting to continue to benefit from the power of scale and compound growth.
The resources business says population growth, decarbonisation and rising living standards will drive demand for energy, metals and fertilisers for decades. The urban population is expected to grow from 4.3 billion to around 7 billion in 2050. Furthermore, predictions are that the global GDP will grow from US$87 trillion to US$400 trillion by 2050.
Management is looking to increase its exposure to future-facing commodities, with copper, nickel and potash.
