The BHP Group Ltd (ASX: BHP) share price is climbing today. At the time of writing, shares in the resources giant were trading for $47.16 – up 2.5%. Similarly, competitor Rio Tinto Limited (ASX: RIO) is up 2.26% to $116.91. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.3% higher.
Neither BHP or Rio have made any significant announcements recently, so, what's behind their relatively large gains today?
The answer may lie deep underground, buried with copper.
What's up with the BHP share price today?
The BHP share price is rising over and above the market index today. Without any recent announcements, the most likely explanation is optimism in the price of copper.
The Sydney Morning Herald (SMH) reported recently BHP expects demand for copper to double over the next 30 years due to surging demand for renewable technology. Copper is vital in the development of green technology. For example, right now, demand for electric vehicles is surging and will continue to do so for the foreseeable future.
Copper is currently trading for US $4.124 per pound on the commodities market. Its up 0.18% today and 17.53% since the beginning of the year. Its price is only slightly down from its 5-year high of around US $4.35 per pound at the end of February.
The price of copper is usually correlated with the global economy. Many are tipping the world's economy to strongly rebound from last year's lows as vaccinations accelerate and we enter a post-COVID world. On top of this and the aforementioned growing demand for renewable energy, there are also some supply issues with copper.
Chile and Peru are the two largest copper producing nations. Coronavirus restrictions in both countries saw mining operations slow down over the last year. In addition, growing support for left-wing politics in both nations is spooking more conservative market players, especially in relation to the mining industry.
How about other ASX copper miners?
The BHP share price is up because of high hopes for copper, but what about its competitors? Rio Tinto has already been mentioned and it is having a similarly good trading day.
Smaller rival OZ Minerals Limited (ASX: OZL), with a market capitalisation of $8.1 billion, shares are up an almost identical 2.7%. Sandfire Resources Ltd (ASX: SFR) (market cap $1 billion) is up an impressive 5.11%. Canadian copper miner Copper Mountain Mining Corporation (ASX: C6C) is 4.06% higher.
BHP share price snapshot
Over the last 12 months, the BHP share price has increased 50.05%. Besides copper, iron ore is BHP's other big money maker. A note out of Macquarie Group Ltd (ASX: MQG) believes the share price will continue to go higher on increasing demand for the ferrous metal.
BHP has a market capitalisation of $215.1 billion.
