BHP share price slips amid reduced production targets

BHP reduced production guidance at its Escondida copper mine in Chile.

| More on:
Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie

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

Key points

  • The BHP share price is in the red on Friday
  • Iron ore prices slipped 2% overnight
  • BHP released its quarterly activities report this morning

The BHP Group Ltd (ASX: BHP) share price is dropping on Friday, down 2.23% in early afternoon trading.

It's not just the BHP share price that's taken a slide, however. With the iron ore price down 1.9% overnight to US$115 per tonne, all the S&P/ASX 200 Index (ASX: XJO) iron ore miners are in the red at the time of writing.

But ASX 200 investors have a little more to consider with BHP today, after the miner released its quarterly update for the three months ending 31 March.

How did the results compare to expectations?

The BHP share price could be under some extra pressure today after the company cut production guidance at several of its mines.

Production guidance at its Escondida copper mine in Chile was reduced to between 1,050 and 1,080 kt. Prior guidance forecast a production range of 1,080 to 1,180 kt.

Shipments of iron ore, BHP's biggest revenue generator, through Port Hedland also slipped over the quarter.

Iron ore shipments of 66.5 million tonnes fell short of consensus expectations of 67.9 million tonnes.

But the quarterly update was far from all bad news, which is why the BHP share price likely isn't faring any worse than its rivals today.

Despite some headwinds over the quarter, BHP maintained production guidance for the full 2023 financial year for iron ore, metallurgical coal, energy coal and copper.

"Last week, OZ Minerals shareholders voted overwhelmingly in favour of BHP's offer," BHP CEO Mike Henry noted on the copper front.

"We are now focused on the safe integration of the two businesses, and we look forward to building an internationally competitive copper business in South Australia."

Guidance for nickel production, however, was lowered slightly to between 75,000 and 85,000  tonnes. That's down from the previous forecast of 80,000 to 90,000 tonnes.

BHP also maintained its full-year unit cost guidance.

BHP share price snapshot

As you can see in the chart below, today's decline leaves the BHP share price right about where it commenced trading on 3 January.

Created with Highcharts 11.4.3BHP Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Motley Fool contributor Bernd Struben 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 Scott Phillips.

More on Resources Shares

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 »

a miner holds his thumb up as he holds a device in his other hand.
Resources Shares

3 reasons why the BHP share price could still be a buy

There are a few reasons why this mining giant could be appealing.

Read more »

Miner standing in front of trucks and smiling, symbolising a rising share price.
Resources Shares

The pros and cons of buying Fortescue shares in June

Let’s dig into whether it’s a good time to invest in this mining giant.

Read more »

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

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

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

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background.
Resources Shares

4 reasons to buy BHP shares today

A leading expert outlines four key reasons BHP shares are a buy.

Read more »