Own BHP shares? Here's what to watch in October

There's a lot to watch next month if you own this mining giant's shares.

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As one of the most widely held shares on the Australian share market, readers will no doubt be keen to know what's on the cards for BHP Group Ltd (ASX: BHP) shares in October.

Let's take a look and find out.

What could impact BHP shares in October?

Given how much iron ore contributes to the mining giant's earnings, the price of the steel-making ingredient will be something to watch in October.

As things stand, the spot iron ore price is fetching US$120.84 a tonne. This is up strongly on BHP's average realised price of US$92.54 a tonne in FY 2023. It is even ahead of FY 2022's average of US$113.10 a tonne.

If iron ore prices remain above US$120 a tonne throughout October, it could force analysts to upgrade their earnings estimates. Especially the team at Goldman Sachs, which has based its estimates on an average iron ore price of US$94.00 a tonne.

What else is happening next month?

All eyes will be on BHP shares when the mining giant releases its quarterly update in the middle of the month. This will give investors a chance to see if the company is on course to achieve its guidance in FY 2024.

As a reminder, the company is guiding to the following for the year:

  • Copper production of 1,720kt to 1,910kt
  • Iron ore production of 254Mt to 264.5Mt
  • Met coal production of 28Mt to 31Mt
  • Energy coal production of 13Mt to 15Mt
  • Nickel production of 77kt to 87kt

For copper and iron ore, this will mean quarterly production of 430kt to 477.5kt and 63.5Mt to 66.13Mt, respectively.

It will also be worth keeping an eye on its costs, with management aiming for Escondida (copper) unit costs of US$1.40 to US$1.70 per pound and WAIO (iron ore) unit costs of US$17.40 to US$18.90 a tonne.

Here's hoping the Big Australian had a strong quarter.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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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