Own BHP shares? Here's what to watch in October

There's a lot to watch next month if you own this mining giant's shares.

| More on:
A group of three men in hard hats and high visibility vests stand together at a mine site while one points and the others look on with piles of dirt and mining equipment in the background.

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

As one of the most widely held shares on the Australian share market, readers will no doubt be keen to know what's on the cards for BHP Group Ltd (ASX: BHP) shares in October.

Let's take a look and find out.

What could impact BHP shares in October?

Given how much iron ore contributes to the mining giant's earnings, the price of the steel-making ingredient will be something to watch in October.

As things stand, the spot iron ore price is fetching US$120.84 a tonne. This is up strongly on BHP's average realised price of US$92.54 a tonne in FY 2023. It is even ahead of FY 2022's average of US$113.10 a tonne.

If iron ore prices remain above US$120 a tonne throughout October, it could force analysts to upgrade their earnings estimates. Especially the team at Goldman Sachs, which has based its estimates on an average iron ore price of US$94.00 a tonne.

What else is happening next month?

All eyes will be on BHP shares when the mining giant releases its quarterly update in the middle of the month. This will give investors a chance to see if the company is on course to achieve its guidance in FY 2024.

As a reminder, the company is guiding to the following for the year:

  • Copper production of 1,720kt to 1,910kt
  • Iron ore production of 254Mt to 264.5Mt
  • Met coal production of 28Mt to 31Mt
  • Energy coal production of 13Mt to 15Mt
  • Nickel production of 77kt to 87kt

For copper and iron ore, this will mean quarterly production of 430kt to 477.5kt and 63.5Mt to 66.13Mt, respectively.

It will also be worth keeping an eye on its costs, with management aiming for Escondida (copper) unit costs of US$1.40 to US$1.70 per pound and WAIO (iron ore) unit costs of US$17.40 to US$18.90 a tonne.

Here's hoping the Big Australian had a strong quarter.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Materials Shares

woman holding two phones connected by lead
Materials Shares

Up 46% in one month! Pilbara Minerals shares lead the charge as lithium stocks rally

Are lithium stocks back in vogue?

Read more »

smiling worker stands before power generator technology
Materials Shares

Fortescue shares jump 5% on record performance

This mining giant was in fine form during the quarter.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Materials Shares

Should you buy Pilbara Minerals shares today?

Let's see if analysts think investors should be buying the lithium giant's shares.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Expert says this ASX mining stock could rise almost 30%

Let's see which miner is being tipped as a buy for investors right now.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

BHP shares charge higher on record copper and iron ore production

Let's see how the miner performed during the fourth quarter.

Read more »

A man stands with hands on hips surveying construction of three high-rise buildings.
Materials Shares

Building activity on the rise – will ASX materials shares benefit?

New data from the March quarter shows a sharp rise in building activity. 

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »