BHP shares continue slide amid investment challenges
The mining titan BHP has seen its share price continue to slide following ongoing difficulties with their new potash mining operations. Amid a global commodities boom with no end in sight, will the BHP share price rise again?
- The BHP share price has fallen 7% since 1 June to £20.43
- BHP has struggled to open a potash mine in Canada
- The ongoing commodities boom has kept BHP optimistic
- BHP has also entered into deals with Microsoft and AWS
- Ready to trade the BHP share price? Open an account today
Why is the BHP share price still falling?
The Anglo-Australian mining company BHPB has seen its share price continue to fall when markets opened in London on 18 June, following a bearish month so far that has seen the BHP share price fall by more than 7% since 1 June.
This comes despite a global commodities boom that has put the prices and demand for BHP's core products, including copper and iron, at multi-year highs. One part of the reason why BHP's share price is falling is the same reason why other mining giants are experiencing a bear run right now.
Moves from China to temper metals prices throughout June have helped to sink the share price of competitor companies such as Glencore, Anglo-American, and Rio Tinto. However, BHP's current share price decline is also related to more localised concerns.
For one, the company's attempts to diversify into the more carbon-neutral and potentially lucrative market of fertiliser mining has met with some early obstacles. BHP Group is currently attempting to finalise a $5.7 billion plan to mine for potash in their Canadian Jansen Mine, amid fierce local opposition.
Although it is expected that the project will move forward, the project represents a significant short-term expenditure for the $47 billion company, and it is unlikely to see any returns until at least the 2030s.
What's the longer-term outlook for BHP shares?
Although the current share price trajectory for BHP is bearish, investors feel more optimistic in the long run. The US asset management firm Harding Loevner recently published a glowing buy recommendation for BHP. The recommendation argued that BHP's long-term profitability and outlook are 'attractive', and Loevner expects 'the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle'.
Meanwhile, despite moves from China, it is unlikely the demand for global commodities will wane any time soon, which is exactly why BHP has maintained that its annual revenues will remain high. BHP's own optimism is also evident in the fact that it revised its Q1 dividend upward by 55% in its HY21 results.
Is the BHP share price on the rise for the long term? Trade BHP shares today
Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty.1 You can also buy and take ownership of UK shares for just £3 with us.2
Open an account to start trading or investing in UK shares.
1 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
2 Deal three times or more in the previous month to qualify for our best rate.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
