The BHP Group Ltd (ASX:) share price had a top run on Tuesday amid rising commodity prices.
In today's trade, the mining giant's share price lifted 2.46% to close at $38.27. In contrast, the S&P/ASX 200 Index (ASX: XJO) jumped 0.26% today.
So why did BHP have such a good day?
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Iron ore prices
BHP shares forged ahead today while other mining giants also had a stellar day. The Fortescue Metals Group Ltd (ASX: FMG) share price rose 2.47% while Rio Tinto Ltd (ASX: RIO) shares increased 1.87%.
On commodity markets, iron ore and copper prices jumped overnight amid news out of China.
ANZ economist Madeline Dunk, in a research note, said:
Copper extended recent gains as concerns over the Chinese property sector eased. Real estate stocks in China picked up after it was reported that Beijing will establish a CNY50bn [AU$10.62 billion] fund to support struggling developers.
Sentiment in the iron ore market was also boosted following news on the Chinese real estate fund.
Iron ore prices gained 0.97% to US$104 per tonne in global markets overnight, Trading Economics data shows.
On the Dalian Commodity Exchange in China, iron ore leapt a massive 7.1% to $105.27 per tonne, mining.com reported. That was its strongest level since July 14.
However, Goldman Sachs has warned that China's property crisis could lower iron ore prices. Goldman cut its three-month target price on iron ore to $70 per tonne and the six-month target to $85 per tonne. This is down from $90 and $110 per tonne, according to Bloomberg.
Goldman said:
This sector segment generates close to a third of China's steel and iron ore demand, which in turn represents close to a quarter of global seaborne demand.
BHP share price snapshot
The BHP share price has fallen 17% in the past year while it's climbed about 3.57% year to date.
However, in the past month alone, BHP shares have dropped 4.37%.
For perspective, the benchmark ASX 200 index has lost almost 8% in the last year.
BHP has a market capitalisation of about $193.7 billion.
