Why is the BHP share price gaining ground today?

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the backgroundAn engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background

The BHP Group Ltd (ASX: BHP) share price is in positive territory on Thursday afternoon.

This comes despite the company not releasing any price-sensitive announcements since its fourth quarter trading update.

At the time of writing, shares in the world’s largest miner are up 0.72% to $37.79.

What’s lifting BHP shares on Thursday?

There are a couple of reasons why the BHP share price has been heading north throughout the day.

The current uptick in iron ore prices is providing support across the mining sector, with most of the majors edging higher.

Shares in Fortescue Metals Group Limited (ASX: FMG) and Mineral Resources Limited (ASX: MIN) are up 1.10% and 6.21%, respectively.

However, the Rio Tinto Limited (ASX: RIO) share price is down 0.91% after the company announced a weakened quarterly performance and a 52% dividend cut.

Nonetheless, this is leading the S&P/ASX 200 Resources (ASX: XJR) index to completely rub out yesterday’s 1.12% loss.

As such, the benchmark index for Australian resource companies is in the green by 1.59% to 5,141.2 points.

With the price of the steel-making ingredient recovering from a 7-month low of US$100 per tonne, the market is being driven by hopeful demand.

Dwindling steel inventories in China have boosted sentiment amid the gloomy economic outlook by economists.

Currently, the iron ore price is fetching at US$106.24, up 0.22% from yesterday’s close.

Previously, the commodity experienced selling pressure following the establishment of a centralised iron ore buyer in China.

As reported by my Foolish colleague, Zach, the Xi administration is aiming to reduce its reliance on Australia’s biggest export.

The move involves Beijing securing lower iron ore prices through larger bulk purchases from its nationalised company, China Mineral Resources Group.

BHP share price snapshot

Over the last 12 months, the BHP share price has fallen almost 19%.

However, when looking at 2022, the mining outfit’s shares are up around 3%.

Based on today’s price, BHP commands a market capitalisation of roughly $193.74 billion.

The post Why is the BHP share price gaining ground today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

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