BHP share price on watch following solid Q1 update

BHP appears to have delivered on expectations during the first quarter.

| More on:
A female worker in a hard hat smiles in an oil field.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BHP Group Ltd (ASX: BHP) share price will be on watch on Wednesday.

That's because the Big Australian has just released its first quarter update.

BHP share price on watch following Q1 update

For the three months ended 30 September, the mining giant reported the following production compared to the fourth quarter of FY 2023:

  • Copper production down 4% to 457kt
  • Iron ore production down 3% to 63.2Mt
  • Met coal production down 34% to 5.6Mt
  • Energy coal production down 24% to 3.6Mt
  • Nickel production down 8% to 20.2kt

In respect to its copper production, a strong underlying operational performance, including record quarterly production at Spence, was offset by planned maintenance across Copper South Australia and lower concentrator and stacking grades at Escondida.

BHP commanded an average realised copper price of US$3.63 per pound during the quarter, which was down 4% from the second-half average in FY 2023.

For iron ore, lower production at WAIO, as a result of planned equipment maintenance and the ongoing ramp-up of the Central Pilbara hub, was partially offset by favourable weather following Tropical Cyclone Ilsa in the prior quarter.

BHP received an average iron ore price of US$98.04 per tonne during the three months, which was down 2% from the average during the preceding six months.

How does this compare to expectations?

Despite reporting declines across the board, BHP's production appears to have come in slightly ahead of expectations for some commodities.

The market was expecting copper production of 450Mt and nickel production of 19.6kt.

It was also expecting iron ore shipments of 71.6Mt on a 100% basis. And while that number was not revealed by BHP with this release, management has reaffirmed its iron ore guidance for FY 2024. So, it appears to be trending at least in line with expectations.

Management commentary

BHP's CEO, Mike Henry, appeared pleased with the quarter. He said:

First quarter operational performance was highlighted by a 11% uplift in copper production from the previous year. After completing a typically busy quarter of planned maintenance particularly at our Australian assets, we are on track to achieve full year production and unit cost guidance. BMA in particular was impacted by planned maintenance, an extended longwall move and low opening inventory following drawdowns in the prior year.

Jansen Stage 1 in Canada is approximately one-third complete after a productive summer. In South Australia, we saw strong operational performance in the first full quarter of production for the new province, as we bring our copper assets together and progress further exploration drilling.

Guidance reaffirmed

Possibly giving the BHP share price a boost today will be management's outlook commentary. It revealed that its FY 2024 production and unit cost guidance remains unchanged for all assets.

This includes copper production of 1,720kt to 1,910 kt and iron ore production of 254Mt to 264.5 Mt.

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 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.

More on Materials Shares

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Liontown shares are down 17% in a month: What's going on?

This lithium share has failed to roar in recent weeks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Own Rio Tinto shares? Add these dates to your diary in 2024

Here's what Rio Tinto has planned for next year.

Read more »

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.
Materials Shares

Why did the Core Lithium share price just hit a 2-year low?

Top broker Goldman Sachs says falling lithium commodity prices may hit Core Lithium particularly hard.

Read more »

A cute little boy, short in height, wearing glasses, old-fashioned bow tie and cardigan stands against a wall near a tape measure with his hand at the top of his head as though to measure his height.
Broker Notes

Are ASX short sellers right about Pilbara Minerals shares?

Let's see what some of the big brokers think.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

What are brokers saying about the BHP share price?

This mining giant's shares are having a strong month. Can the run continue?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Which ASX lithium stock has soared 246% in just a month?

IPO investors are rubbing their hands in delight.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

What is the outlook for ASX lithium shares in 2024?

How are things looking for these miners?

Read more »

a miniature moulded model of a man bent over with a pick working stands behind a sign that has lithium's scientific abbreviation 'Li' with the word lithium underneath it against a sparse bland background.
Materials Shares

What will the lithium price be in 2024?

Will lithium prices continue to fall next year?

Read more »