Shares in mining giant BHP Group (BHP) weakened today as copper prices fell on tariffs fears and potentially faltering Chinese demand.
Benchmark copper on the London Metal Exchange was off by as much as 0.5% sending BHP’s shares down 0.39%. Mining rival Rio Tinto (RIO) was 0.54% lower and Southern Copper (SCCO) was 0.5% less shiny.
Tariffs Making Copper Producers Nervous
The reason behind the drop continues to be uncertainty and nervousness over President Trump’s tariffs policy and what that might mean for copper producers. Although he has resisted adding copper to his metals tariffs list to date, many experts believe it is next in line. That is important not just for the mining industry itself but also the end-users of copper which plays a huge role in the clean energy revolution given its use in electric vehicles, wind turbines and solar panels. These businesses are already facing pressures from Trump’s preference for fossil fuel energy. “Tariffs pose a headwind to growth and demand,” said Bank of America analyst Michael Widmer, as reported by Reuters. “The last time Trump introduced tariffs in 2018, many investors rightly concluded that shorting base metals was a very attractive trade.”
Chinese Copper Lift Fails to Happen
Also weighing on the copper price, according to a Reuters report, was data from the International Copper Study Group (ICSG), showing the market had a 301,000 ton surplus last year, compared with a 52,000 ton shortfall in 2023. In addition, the expected pick-up in demand for copper from China post its lunar new year holiday was in doubt following less than convincing housing data. This quashed hopes of an immediate domestic economic surge and copper inventory hike.
Is BHP a Good Stock to Buy Now?
On TipRanks, BHP has a Moderate Buy consensus based on 3 Buy and 3 Hold ratings. Its highest price target is $56. BHP stock’s consensus price target is $52.20 implying an 1.95% upside.
