Shares in the iron ore major enjoyed a short-lived record high on Friday.
The post Why the BHP (ASX:BHP) share price is down 4% this week appeared first on The Motley Fool Australia. –
Shares in the iron ore major finished last week on a high note, marking a record high on Friday of $51.91.
However, this week has proven to be challenging for BHP shares, slipping 4.6% to $49.52.
Overnight selloff drives the BHP share price lower on Tuesday
Major US indices fell overnight with the Dow Jones Industrial Average Index (DJX: .DJI), S&P 500 Index (SP: .INX) and Nasdaq Composite (NASDAQ: .IXIC) sliding 2.09%, 1.59% and 1.06% respectively.
CNBC reported that “key stocks linked to global economic growth” fell overnight, with high-profile US shares such as Boeing, General Motors and Caterpillar sliding 4.94%, 4.38% and 2.34% respectively.
The BHP share price is also listed on the New York Stock Exchange, where its counterpart slipped 2.79% overnight to US$72.34.
BHP delivers a solid full year update
Despite the BHP share price losing ground on Tuesday, the company delivered a solid fourth quarter and full-year operational update.
BHP Chief Executive Officer Mike Henry said in response to the results:
We achieved production records at our Western Australia iron ore operations and the Goonyella Riverside metallurgical coal mine in Queensland.
South Flank, the largest and one of the most technically advanced iron ore mines in Australia, began production in May and will boost the overall quality of BHP’s iron ore product suite.
BHP is in great shape. Our operations are performing well, we continue our track record of disciplined capital allocation, and our portfolio is positively leveraged to the megatrends of decarbonisation, electrification and population growth.
What about iron ore prices?
According to Market Index, iron ore spot prices have remained firm overnight, fetching US$219.5/tonne.
Elsewhere, Chinese iron ore futures on the Dalian Commodity Exchange opened 1.2% lower, just shy of 1,220 yuan or US$187/tonne.
BHP share price snapshot
The BHP share price has moved broadly in line with the S&P/ASX 200 Index (ASX: XJO) year to date, up 16.8% and 10.4% respectively.
Looking ahead, Macquarie is bullish on the medium-term outlook for BHP shares, with an outperform rating and $63.00 target price.
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Motley Fool contributor Kerry Sun 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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.