The BHP Group Ltd (ASX: BHP) share price slumped 5.4% lower last week in a disappointing week for shareholders. Let's see what's moving the Aussie mining giant's shares right now and what lies ahead in 2021.
Why the BHP share price is down 5% in a week
Last week was a relatively big one for the iron ore giant. For starters, BHP provided an update on its Western Canada potash mine on Wednesday.
The BHP share price slipped lower despite the company outlining what it expects from the Jansen Mine in Saskatoon, Canada.
BHP expects to generate an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of circa 70% from the mine, which is forecast to be paid back 7 years after operations commence.
The company is hoping operations will start in early 2027 and bring a globally diverse customer base, increasing BHP's operating footprint and providing greater immunity from economic cycles.
Another factor moving the BHP share price last week was falling iron ore prices. Iron ore prices have now slipped by more than 20% in a month and have nearly halved since hitting US$233 per tonne in May.
The sharp decline is, perhaps unsurprisingly, largely being driven by China. According to Reuters, China released a report stating its steel output reached its lowest point since March 2020 last month.
That was disappointing news for the Aussie iron ore giant and its investors with the BHP share price sliding lower to end the week.
What's next for BHP?
Perhaps the biggest news ahead for BHP is its proposed petroleum division merger with Woodside Petroleum Ltd (ASX: WPL). The two ASX giants are aiming to create a global, top-10 independent energy company by production with the transaction.
As with any resources share, underlying commodity prices will play a role in how the BHP share price fares in the near term. Investors will be watching China's next moves closely for signs of strength or weakness in iron ore imports in 2021.
