The BHP Group Ltd (ASX: BHP) share price is $61.01, up 1.4%, at the time of writing on Thursday.
BHP shares were in the red in early trading, falling 1.9% to an intraday low of $59.06.
The market's largest company is faring much better this afternoon; however, this volatility is emblematic of a big week.
BHP and other S&P/ASX 200 Index (ASX: XJO) iron ore shares have had a tumultuous time of late.
Last Wednesday, BHP shares rose to a record high of $65.04. Since then, they have tumbled 9% to today's intraday low.
Australia's largest listed miner has not announced any news during this time.
So, what's going on?
Image source: Getty Images
Why are BHP shares so volatile?
Some big news that broke last Thursday was the trigger for the 9% fall in BHP shares over the past week.
Last week, we learned of a major production lift at the giant Simandou iron ore mine in Africa.
Simandou, located in the Republic of Guinea, is the world's largest undeveloped high-grade iron ore deposit.
It is majority-owned by Chinese investors, but Rio Tinto Ltd (ASX: RIO) also owns a big piece of the pie.
Operations at Simandou began in November.
In the first three months of 2026, the mine shipped 0.6 million tonnes of iron ore.
Then came a big jump to 1.3 million tonnes in April, then 2.2 million tonnes in May, according to Bloomberg.
This has raised concerns about oversupply at a time when demand from China is weakening.
And that spells trouble for the iron ore price.
What is the iron ore price?
The iron ore price has tumbled 9% over the past month to a near 2-month low of US$101.70 per tonne today.
China's faltering property market has led to softer demand for iron ore over time.
However, China is still a major steel producer and is increasingly exporting steel to other countries.
Trading Economics analysts said new data showed China's iron ore imports dropped nearly 6% from April to May.
This defied the market's expectations of an increase amid improved steel margins and higher shipments from major producers.
The analysts said:
China imported 97.71 million tons of the key steelmaking ingredient last month, down from 103.9 million tons in April and below analysts' forecasts of 104 million to 110 million tons.
Analysts attributed the decline to cautious purchasing by steelmakers, who have limited buying to immediate needs ahead of a seasonally weaker demand period.
Demand from China's steel sector has also softened earlier than usual this year, as persistent rainfall and the early arrival of summer heat have slowed construction activity.
What's going on with Chinese demand?
While Chinese demand for iron ore is modifying right now, Todd Warren, a resources specialist and portfolio manager at Tribeca Investment Partners, said China remains the biggest buyer of seaborne iron ore in the world.
In an interview with CommSec, Warren said China still wants iron ore, not for its property market, but to create export earnings.
Warren said:
What's become more and more clear is that the Chinese are now exporting a lot of their steel… about 15% of the steel they produce is now exported to the world, particularly Asia.
The only reason they can export it is because there's demand for it. So there's a buyer for that product.
India is obviously the next big population base that could see a rise in demand for steel. And they've been historically self-reliant, so, domestically reliant on iron ore.
But once they grow, as did China, once upon a time, they grow beyond their ability to domestically supply.
They'll be reliant on the seaborne market.
An additional drag on the BHP share price has been a 6.5% fall in the copper price to US$6.20 per pound today.
That's still high by historical standards, but a fair way off the record of US$6.63 per pound set last Tuesday.
Copper now forms a greater component of BHP's earnings before interest, taxes, depreciation, and amortisation (EBITDA) than iron ore.
Should you buy BHP shares?
Since last Wednesday, when the BHP share price set that new record at $65.04, four brokers have reiterated their hold ratings.
Three of them raised their share price targets.
Jefferies increased its target from $57 to $68. Citi went from $55.21 to $66.64, and RBC Capital moved from $56 to $57.
UBS has a target of $60 on BHP shares.
On The Bull this week, Tony Locantro from Alto Capital put a sell rating on BHP shares.
He thinks it may be time to take profits, commenting:
While the long term outlook for copper remains attractive, investor enthusiasm surrounding electrification and AI-related demand has contributed to a strong share price performance.
In our view, the strong operational result, elevated expectations and risk-reward balance support taking some profits.
BHP share price snapshot
The BHP share price has increased 56% over the past 12 months.
This compares to just a 0.8% bump for the benchmark S&P/ASX 200 Index (ASX: XJO).
