The BHP Group Ltd (ASX: BHP) share price is lifting on Friday to finish the week on a high.
BHP shares are rising 0.92% and are currently trading at $38.52. For perspective, the
S&P/ASX 200 Index (ASX: XJO) is 1.25% in the red.
So why is the BHP share price rising today?
BHP shares lift
BHP is a major iron ore producer and derived more than half of its earnings in FY22 from the commodity. The mining giant also produces copper, nickel, coal, potash and coal, among other commodities.
Higher iron ore prices could be helping the BHP share price today. Iron ore prices have lifted 1.51% to US$101 per tonne, Trading Economics data shows.
ANZ senior economist Adelaide Timbrell said iron ore prices lifted on "expectations of further support for the construction sector in China". In a research note, she added:
A meeting chaired by Premier Li Keqiang reaffirmed the government's plan to front-load next year's special government bond quota. The PBoC will also allow some cities to cut mortgage rates for first home buyers. Investors hope this will result in a boost to construction-related steel demand.
The copper price also rose 1.6% to US$7542 per tonne overnight, while nickel lifted 2.5% to US$22,348 per tonne.
Analysts at Macquarie have recently placed an outperform rating on the BHP share price and lifted the price target on the company's shares to $44. This is 14% more than the current share price. Macquarie has increased earnings estimates for the company up to FY 2026 by 5% per year.
BHP reported a record underlying earnings before interest, tax, depreciation and, amortisation (EBITDA) of US$40.6 billion in FY22, 16% more than the previous financial year. Of these earnings, US$21.7 billion came from iron ore, while US$8.6 billion was derived from copper and US$7.7 billion was delivered from metallurgical coal.
Share price snapshot
BHP shares have soared nearly 16% in the past year. In the year to date, they have risen climbed nearly 16%, but have fallen 8% in the past month.
For perspective, the ASX 200 has lost nearly 11% in the past year.
BHP has a market capitalisation of more than $196 billion based on the current share price.
