The BHP Group Ltd (ASX: BHP) share price has been a relatively strong performer in the current financial year.
Since 30 June 2022, the mining giant's shares have recorded a gain of approximately 8% and rewarded shareholders handsomely with some big dividends.
The question now, though, is whether FY 2024 will be just as successful. Let's find out!
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What's the outlook for the BHP share price in FY24?
Opinion remains divided in the broker community on where the BHP share price is heading from here.
For example, analysts at Goldman Sachs, Macquarie, and Morgans all see scope for the Big Australian's shares to rise in the region of 10% from current levels.
Whereas Ord Minnett and UBS are tipping an approximate 10% decline from where its shares currently trade. And then finally, there's Citi and Morgan Stanley which feel its shares are about fair value today.
But regardless of what any analysts are recommending, arguably the biggest influence on the miner's shares will be the price of iron ore.
During the first half of FY 2023, BHP's iron ore operations generated 46% of its revenue, 57.8% of its underlying EBITDA, and 62% of its EBIT. Clearly, the price of the steel-making ingredient has a major impact on its profits and dividends.
So, if prices are stronger than expected, then there's every chance that the BHP share price will outperform. Conversely, if the iron ore price is softer than expected, it could underperform.
According to Goldman Sachs' latest commodity price forecasts, its analysts are expecting the benchmark iron ore price to average US$104 a tonne in 2023 and then US$93 a tonne in 2024.
Investors may want to keep track of prices and see how they trade in comparison to these estimates.
In addition, given its recent acquisition of OZ Minerals, copper is becoming more important to BHP. So, it could be worthwhile keeping an eye on how this base metal trades also.
Goldman is expecting the copper price to average US$3.95 a pound in 2023 and then US$4.59 a pound in 2024.
What else?
Mining royalties are another factor that could impact the BHP share price.
Only today, The Australian reports that BHP's CEO, Mike Henry, has lashed out at the Queensland government's coal royalty hike.
Henry even went so far as to say that this royalty hike would have a bigger impact on BHP's investment decisions than the long-running fight over taxes on copper miners in Chile. He labelled Queensland "the highest taxing regime for mining in the world."
If the Queensland government were to ease its royalty demands, then this would likely boost BHP's profits and potentially its share price.
Whatever happens, FY 2024 will no doubt be an interesting ride for investors and shareholders alike.
