The BHP Group Ltd (ASX: BHP) share price opened sharply lower today.
At $42.74 per share, the S&P/ASX 200 Index (ASX: XJO) iron ore miner was down 3.3% from Monday's closing price of $44.17 a share.
While the BHP share price has recouped much of those losses, the miner is still down 1.11% in intraday trading this afternoon. And shares are down a precipitous 7.6% since last Wednesday's close.
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What can ASX 200 investors expect next?
While BHP earns a significant slice of its revenue from copper and a sizeable amount from coal, iron ore remains the company's biggest revenue earner.
As you'd expect, then, the iron ore price has a big impact on the BHP share price.
And the price of the industrial metal has been falling hard since hitting recent highs of US$132 per tonne on 15 March.
As for the past week's steep decline in BHP shares, that was fuelled by a 15% fall in the iron ore price. It was just last Wednesday that the steel-making metal was trading for US$120 per tonne. Having dropped another 2% overnight, iron ore is currently trading for US$102 per tonne.
So, what can ASX 200 investors expect for the BHP share price next?
Well, if the analysts at Citi have it right, there could be some more headwinds ahead in 2023.
Citi analyst Wenyu Yao believes the iron ore price could drop to US$90 per tonne amid lower steel production and narrow profit margins at China's iron ore hungry steel mills.
"We have been cautious on China's steel demand and iron ore amid an uneven economic recovery and heightened policy risk, though things have unravelled sooner than our base case," Yao said.
"We see potential risk for further downside below $100 a tonne, if steel demand fails to show meaningful improvement."
Further downside would most likely see BHP, and the other ASX 200 iron ore shares, remain under pressure until demand picks back up.
That hasn't appeared to dissuade Morgans though. The broker has raised BHP to an add rating, with a $50.40 price target.
BHP share price snapshot
As you can see in the chart below, the BHP share price is down 4% over the past 12 months.
However, investors who snapped up shares in the ASX 200 miner when iron ore was trading at recent lows on 1 November will be sitting on gains of 17%.
