The BHP Group Ltd (ASX: BHP) share price is enjoying its best day in almost four months, up 3.87% to $48.01 at the time of writing.
A bump to the iron ore price overnight, largely driven by China's ongoing economic reopening, is likely behind the gain today. The iron ore price went up by 1.59% to US$128 per tonne.
In addition, the price of hot-rolled steel (HRC) has skyrocketed in the past week by almost 20%. According to Trading Economics, it's up by 50% over the past month to US$1,193 per tonne.
China is the world's biggest steel producer and iron ore is used to make steel.
Image source: Getty Images
What else is pushing the BHP share price higher?
The Caixin China General Manufacturing PMI, which stands for 'purchasing managers' index', increased from 49.2 in January to 51.6 in February 2023. This was above the market consensus expectations of 50.2.
A PMI of 50 is the middle point between expanding factory activity and contracting activity. This is the first increase in factory activity since July 2022 and reflects the end of China's zero-COVID policy.
Many other PMI metrics indicate the Chinese economy is rapidly resuming activity.
Biggest one-day gain since November
Today's gain for the BHP share price is the largest since Monday 14 November when it went up by 4.56%.
That spike was also due to a lift in the iron ore price by 4.47%. In addition, there was news out of China regarding a rescue plan for its faltering property sector, including extending developer's loans to help their liquidity.
The day before, Australian Prime Minister Anthony Albanese talked to Chinese Premier Li Keqiang in another sign of thawing relations between Australia and China.
