BHP share price
The BHP share price (LON: BHP) performed relatively well during the pandemic. The company recovered quickly, then far exceeded its pre-pandemic level in 2021. Over the past two weeks, it has seen a substantial 7% decline, as momentum around commodities markets s ‘is stopped.
The production numbers serve as a useful guide to the true value of the BHP share price. Mining giant FTSE 100 has confirmed that it achieved record production at Western Australia Iron Ore in the last quarter.
Oil production rose 7% to 25.4 million. While copper and iron ore production fell 9% to 391.4 kt and 4% to 59.9 Mt respectively. Power coal production jumped 34% on higher volumes at Carrejon due to a strike in the previous period.
BHP Managing Director Mike Henry commented: “BHP’s strong safety and operating performance continued during the quarter, with record year-to-date production at Western Australia Iron Ore, the Goonyella Riverside metallurgical coal mine in Queensland and the throughput of the concentrator at Escondida in Chile. “
“We reliably execute our major projects, bringing in new supplies of copper, oil and iron ore. Growth option Spence and Samarco are increasing and West Barracouta in the petroleum business started production this month. First production from Petroleum’s Ruby Project is expected in the coming weeks and South Flank, with its higher grade and lump ratio, is on track to begin production mid-year.
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BHP said it was continuing its decarbonization efforts, in line with the Paris Climate Agreement. The company has developed partnerships with three major steelmakers whose combined production represents up to 10% of world production.
UK Investor Magazine pointed out earlier this year that BHP’s performance will depend on the price of iron ore in 2021. The price of iron ore, the ingredient used to make steel, plunged on Monday as China plunged suggested that it would aim to calm rising prices amid inflation concerns.
China’s Economic Planning Agency has said it will tackle monopolies in commodity markets, as well as the spread of false information. Following a recent surge, the iron ore composite fell 6.03% to $ 161.09 as the Chinese government announcement made its way into the markets.
While the price of iron ore has seen a decline over the past two weeks, it remains up 20.1% in the past three months. Robert Rennie, head of market strategy at Westpac, anticipates further intervention by the Chinese state. This could pose a problem for BHP’s share price in the future, especially since China is the biggest consumer of iron ore.