The BHP Group Ltd (ASX: BHP) share price is up a stellar 8.2% since the closing bell on 30 December.
That's despite today's 0.6% retrace following the hotter-than-expected CPI numbers just released by the ABS.
The S&P/ASX 200 Index (ASX: XJO) iron ore giant is currently trading for $49.37. The BHP share price, as you can see in the chart below, closed out 2022 at $45.63.
Is it too late to buy?
With those kinds of gains already in the bag so early in 2023, is it too late to buy BHP shares?
The answer to that question largely relies on what happens with iron ore prices (the miner's top revenue earner) and copper prices (its number two revenue earner) over the coming months.
The BHP share price has already benefited from a big lift in the price of both metals in 2023.
Iron ore was trading for US$118 per tonne at beginning of the calendar year and is currently fetching US$125 per tonne, up 6%.
The copper price has gained even more, lifting 12% since 30 December to currently trade for US$9,315 per tonne.
And while no one has a working crystal ball, most analysts are tipping significant further gains for both industrial metals over the year ahead.
Iron ore could gain from increased demand out of China, as the world's most populous nation reopens following three years of pandemic lockdowns.
Copper could also benefit from China's reopening, while demand for the red metal is expected to continue to run high for its critical role in the world's transition towards electrification.
Both of these aspects would suggest it's not too late to buy, even after the big BHP share price rally.
On the copper front, Goldman Sachs head of commodities research Jeff Currie believes that in the "longer-term" the copper price will reach US$15,000 per tonne.
Citing "a structural imbalance in these markets", Currie said "You are likely to see peak copper supply in 2024."
As for iron ore, Morgan Stanley commodities strategist Marius van Straaten notes the commodity rally coming ahead of China's reopening is largely built on hype rather than actual increases in steel production.
According to van Straaten (quoted by The Australian Financial Review):
The previous nine bull markets we looked at were all underpinned by either periods of expanding China steel production or tightening supply from the iron ore majors.
While China's steel mills have been restocking ore recently, this is basically the first serious bull market that is mostly driven by sentiment/optimism, rather than an actual physically tightening market.
Despite the current speculative-driven nature of the price increases, van Straaten sees iron ore trading for US$140 in the June quarter. That represents a 12% increase from today's levels and would certainly offer some helpful tailwinds for the BHP share price.
What else could boost the BHP share price in 2023?
Atop potentially rising iron ore and copper prices, the BHP share price could receive a boost should the miner's $28.25 per share (approximately $9.6 billion) cash takeover proposal of ASX 200 copper stock OZ Minerals Limited (ASX: OZL) go through.
The Oz Minerals board has unanimously recommended shareholders approve the acquisition. Shareholders are expected to vote on the proposal in late March or early April.
And let's not forget the juicy, fully franked dividends on offer.
At the current share price, BHP pays a 9.4% trailing dividend yield. That will place the big miner high on the radar of income investors, increasing the demand for (and potentially the price of) its shares in 2023.
