BHP Group share price: production update and trading view

In this article we breakdown the BHP Group’s operational update as well as a trading view on the various listings of the company.

BHP Group production update

The BHP Group has released a production update for the third quarter (Q3) of the 2021 financial year (FY21). The update shows that the group i­s well on track to meet the upper end of full-year guidance, although

Petroleum production supported by acquisition

Petroleum production for the quarter (up 7% from the previous quarter), benefitted from both the completion of the Shenzi acquisition (November 2020), and a weaker preceding quarter which was negatively impacted by inclement weather affecting operations in the Gulf of Mexico. Full-year production is expected to be in the upper half of the group’s FY21 guidance.

Copper production on track to meet full-year guidance

Copper production was negatively impacted by Covid-19-related restrictions at the Group’s Escondida operations. Copper is the second-largest contributor to group revenue (just short of 25% thereof) and full-year production is on track to meet the upper end of company guidance.

Iron ore production (year to date) boosted by WAIO operations

Iron ore production for the quarter was negatively impacted by inclement weather reducing output at the Group’s Western Australian Iron Ore (WAIO) operations. However for the year to date production of the steel-making ingredient is at record levels and on track to meet the upper half of the groups full-year guidance. Iron ore remains the most significant contributor to total group revenue, accounting for nearly 50% thereof.

Coal fortunes mixed over the quarter

Energy coal volumes were elevated against the prior quarter which was negatively impacted by strike activity, while metallurgical coal volumes in Q3 2021 were flat relative to Q2 2021. Coal accounts for around 15% of total group revenue and forward-production guidance has been lowered marginally due to adverse weather affecting operations.

BHP Group share price: technical analysis

The BHP Group (ASX)

The BHP ASX share price currently trades in a sideways rangebound environment over the medium term. In the short term, we see that the price has been met with resistance at the 47.45 level. The stochastic also suggests that BHP is overbought at current levels.

While 47.45 remains resistance 43.60 becomes the downside support target. 43.60 remains a key level and should it be broken this could suggest a longer term bearish price reversal for the BHP Group.

However, should short term weakness not ensue, and instead the price move to close firmly above the 47.45 resistance level, the recent high at 50.90 becomes the next resistance target considered.

The BHP Group Plc (LSE)

Similarly to the ASX listing, the share price of BHP (LSE) trades in a sideways rangebound environment over the medium term. In the short term we see that the price has been met with gap resistance at the 2270 level. The stochastic also suggests that BHP is overbought at current levels.

While the 2270 to 2325 gap range remains resistance 2000 becomes the downside support target. 2000 remains a key level and should it be broken this could suggest a longer term bearish price reversal for the BHP Group.

The BHP Group (JSE)

Similar to the ASX and LSE listings, the BHP (JSE) share price trades in a sideways rangebound environment over the medium term. In the short term, we see that the price has started to form a bearish reversal pattern before the 45950 resistance level. The stochastic also suggests that BHP trades around overbought territory at current levels.

While 45950 remains resistance 41280 becomes the downside support target. 41280 remains a key level and should it be broken this could suggest a long-term bearish price reversal for the BHP Group.

However, should short term weakness not ensue, and instead the price move to close firmly above the 45950 resistance level, the recent high at 49560 becomes the next resistance target considered.

Summary

  • BHP is on track to deliver full-year production, mostly at the upper end of previous guidance
  • Petroleum production supported by completion of Shenzi acquisition
  • Copper on track to meet full year guidance
  • BHP iron ore production (year to date) boosted by WAIO operations
  • Coal fortunes mixed over the quarter
  • BHP Group ASX, LSE and JSE share prices look overbought in the near term, while trading in a broader rangebound environment longer term

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