Why is the BHP share price crashing 5% today?

a close up of a man with wide open eyes and wide open mouth holding his head and reacting in shock and surprise to some share market ews.a close up of a man with wide open eyes and wide open mouth holding his head and reacting in shock and surprise to some share market ews.

It’s been a fairly disappointing start to the trading week for the S&P/ASX 200 Index (ASX: XJO). So far this Monday, the ASX 200 has lost another 0.7% and is now approaching 6,400 points. But it’s been a far worse day for the ASX 200’s largest share by market capitalisation – BHP Group Ltd (ASX: BHP).

The BHP share price has been slammed today. The mining giant is currently down by a nasty 4.82% at $40.47 a share. This latest move means BHP is now down by almost 7% over the past five trading days alone. Its losses over the past month are now stretching close to 15%.

So what’s going on with BHP today to elicit such a loss?

Why is the BHP share price copping a 5% drop today?

Well, it’s not exactly clear. We did hear news last Friday that the company has changed its mind and now wants to keep its Mt Arthur coal mine. But this is unlikely to be meaningfully impacting BHP shares today.

So the most likely culprit is the iron ore price. Iron ore forms the crown jewel of BHP’s mineral production. The company has benefitted enormously from high iron ore prices over the past few years. These have enabled BHP to fund record dividend payments.

But according to reporting in the Australian Financial Review (AFR) today, iron ore futures have just taken a dive. The paper reports that iron ore futures are currently down 9.1% in China, “as concerns mounted about an economic slowdown and the impact it will have on steel demand”.

This would explain why BHP’s fellow ASX 200 iron ore miners are also bleeding heavily today. Rio Tinto Limited (ASX: RIO) shares are also down around 5% to just over $101. Fortescue Metals Group Limited (ASX: FMG) has copped an even worse beating. Fortescue shares are down a nasty 7.3% to $17.23 at the time of writing.

So it’s likely to be fears over the price of iron ore that is hurting the BHP share price so dramatically today.

At the current BHP share price, this ASX 200 mining giant has a market capitalisation of $204.7 billion, with a trailing dividend yield of 11.86%.

The post Why is the BHP share price crashing 5% today? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of January 12th 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Sebastian Bowen 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.

from The Motley Fool Australia https://ift.tt/xXBPht9

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s