It's head above the clouds for the BHP Group Ltd (ASX: BHP) share price.
Shares in the iron ore major opened 3.06% higher to a record high of $53.50 on Tuesday.
At the time of writing, the BHP share price is up 2.72% to $53.32.
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Why the BHP share price continues to set all-time highs
Chinese iron ore prices make headway this week
Last week was a volatile week for the BHP share price, battling both challenges from the broader S&P/ASX 200 Index (ASX: XJO) and iron ore markets.
Iron ore prices on China's Dalian Commodity Exchange experienced their steepest weekly drop in 17 months last Friday after authorities imposed steel production caps in multiple cities.
According to Mining.com, "Steel producers in Anhui, Gansu, Fujian, Jiangsu, Jiangxi, Shandong, and Yunnan have been told to limit their output to 2020 volumes amid China's intensified efforts to curb carbon emissions."
This could be a reason why the BHP share price tumbled 5.07% from $51.87 to $49.24 between Monday and Tuesday last week.
Encouragingly, the most-traded September iron ore futures contract in China has tipped higher this week from approximately US$172 to US$178.
Commentary from Navigate Commodities managing director Atilla Widnell, reported by Mining.com said:
We're fundamentally and technically bullish in the short term, with arrivals of iron ore cargoes landing in China expected to fall faster than domestic consumption over the past and coming week.
There certainly isn't sufficient supply availability from the seaborne market to feed Chinese steel consumption growth in the second half, particularly for long products.
It's not just iron ore that's pushing higher
While iron ore is a driving factor behind the BHP share price, the company is a diversified producer of petroleum, copper, coal and nickel.
Commodity prices, more broadly speaking, have rallied strongly across the board since the initial COVID-19 selloff in 2020.
Bloomberg's commodity index, a basket of energy, metal and agriculture prices, has rallied 41.08% in the past 12 months and 23.8% year-to-date to a 5-year high.
