BHP Group Ltd (ASX: BHP) shares will be on watch next week.
That's because the mining giant will be releasing its highly anticipated quarterly update on Thursday 17 October.
Ahead of the release of the update, let's see what the market is expecting from the Big Australian.
BHP quarterly preview
According to a note out of Goldman Sachs, its analysts are expecting the mining giant to report production declines across the board for the first quarter of FY 2025 compared to the fourth quarter of FY 2024.
For copper, the broker is forecasting production of 470kt. This will be down 7% quarter on quarter but is higher than the consensus estimate for a decline to 463kt.
Iron ore shipments are expected to come in at 69.9Mt for the three months. This will be an 8% decline on the fourth quarter of FY 2024. Once again, Goldman is ahead of the market with its estimate. The consensus estimate stands at 69.1Mt.
BHP's metallurgical coal production is forecast to be 4.3Mt by the broker. This represents a 12% decline quarter on quarter. Though, on this occasion, Goldman's estimate is short of the consensus estimate of 4.4Mt.
Finally, Goldman is expecting the Big Australian's nickel production to come in at 12.3kt, representing a whopping 46% decline on the previous quarter. The market is expecting an even sharper decline, with the consensus estimate currently at 11.1kt.
What is the broker saying about the commodities?
As well as providing its quarterly estimates, the broker has given its verdict on commodities.
It revealed that it thinks iron ore is overvalued, but remains positive on copper, aluminium, alumina, and met coal. It explains:
We see limited reasons to be positive [on] iron ore at ~US$110/t which we see as overvalued based on fundamentals. We like met coal though into 2025 at ~US$200/t based on cost curve support and increasing demand from India which was confirmed by our recent India M&M trip. We continue to prefer base metals (mainly copper, aluminium and alumina) over the medium term (supported by feedback from our global M&M conference in London), and we remain negative battery materials over the next 12-24 months.
Overall, the supply side has done all the heavy lifting to support commodity prices in 2024 and now demand has to do the heavy lifting in 2025. We will need to see a sustained pick up in developed market industrial production, construction and consumer activity to see a fundamental re-rating in metal prices.
