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 CFDs.

Open an account to start trading or investing in UK shares.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.