Why is the BHP share price having such a ripper day?

The BHP Group Ltd (ASX: BHP) share price is having a top run today.

BHP shares are up 4.75% and are currently trading at $44.09. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.25% today.

So what is going on with the BHP share price?

Iron ore prices surge

BHP is not the only ASX 200 mining share rising today. The Rio Tinto Limited (ASX: RIO) share price is up 4.75%, while the Fortescue Metals Group Limited (ASX: FMG) share price is soaring 7.66%.

The iron ore price lifted 4.47% to US $93.5 in global markets on Friday, trading economics data shows.

Iron ore lifted amid news out of China. China is the world’s biggest steel producer and iron ore is used to make steel.

China has outlined a plan to rescue the property sector, Bloomberg reported. The measures are designed to ensure “stable and healthy development” in the sector, according to the publication.

Further, China has also slightly eased COVID-19 restrictions, boosting sentiment in commodities including iron ore.

Australian Prime Minister Anthony Albanese also had a “constructive” chat with Chinese Premier Li Keqiang in Cambodia on Sunday, Reuters reported. He said in quotes cited by the publication:

I say it was constructive, it was positive. I have said repeatedly about the relationship with China that we should cooperate where we can.

Another factor that can weigh on the iron ore price is the US dollar. A weaker US dollar makes commodities less expensive in other currencies, increasing demand. The US dollar tumbled late last week amid better than expected inflation data. However, the greenback is climbing today after the US Federal Reserve warned interest rate hikes could continue.

BHP highlighted its strength in the iron ore sector in an Annual General Meeting presentation late last week. BHP said:

We achieved record shipments from our iron ore business here in Western Australia for the third year running.

We are also increasing our output at Western Australian Iron Ore to 300Mtpa+, with
studies underway for a 330Mtpa option.

BHP share price snapshot

The BHP share price has surged 31% in the past year, while it has jumped 19% year to date.

For perspective, the ASX 200 has shed nearly 4% in the past year.

BHP has a market capitalisation of more than $223 billion based on the current share price.

The post Why is the BHP share price having such a ripper day? appeared first on The Motley Fool Australia.

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• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
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Motley Fool contributor Monica O’Shea 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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