Why did the BHP share price have such a cracking session today?

The Big Australian enjoyed a fine day on the market on Tuesday.

Key points
  • The BHP share price jumped 2.46% on Tuesday 
  • Iron ore and copper prices forged ahead in global markets 
  • Easing concerns about the Chinese property sector helped push up the price of these commodities 

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?

A smiling miner with a green hard hat stands in front of a piece of heavy mining equipment.

Image source: Getty Images

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.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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