The BHP Group Ltd (ASX: BHP) share price has dropped into the red on Wednesday morning.
At the time of writing, the mining giant's shares are down 1.5% to $39.06.
Why is the BHP share price falling?
Investors have been selling down the BHP share price today after the Big Australian's first quarter production update fell short of expectations.
Here's a summary of how BHP performed compared to consensus estimates:
- Copper production of 410.1kt (cons. 429kt)
- WAIO iron ore production of 72.1 Mt (100% basis) (cons. 71.5MT)
- Metallurgical coal production of 6.7Mt (cons. 7.6Mt)
- Nickel production of 20.7Mt (cons. 21.1Mt)
As you can see, the company has missed on three of the four commodities, much to the disappointment of the market. A range of factors weighed on BHP's production. These include wet weather, maintenance, and lower concentrator feed grades.
Were there any positives?
The good news is that it wasn't all bad news. Despite this softer than expected production, management has reaffirmed its full year guidance for both production and costs.
This means that FY 2023 iron ore production guidance remains 249Mt to 260Mt, copper production remains 1,625kt to 1,825kt, and met coal production guidance remains 58Mt to 64Mt.
Also failing to support the BHP share price was commentary from BHP's CEO Mike Henry. He spoke positively about the company's outlook, saying:
We expect global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability. BHP remains well positioned, with a portfolio and balance sheet to withstand external challenges and a strategy positioned to benefit from the global mega-trends of decarbonisation and electrification.
