The BHP Group Ltd (ASX: BHP) share price finished July in the green, up 0.46% at $46.01 a share.
The S&P/ASX 200 Index (ASX: XJO) mining giant recently reported some solid quarterly results and offered potential production growth in its FY24 guidance.
The question now is, what might investors expect for the month ahead?
What might ASX 200 investors expect in August?
The performance of the BHP share price in August will largely depend on investor sentiment and any potential price-sensitive news the ASX 200 miner might release over the course of the month.
Among other factors, that sentiment will be influenced by any big changes in commodity prices.
BHP derives most of its income from iron ore, with copper coming in at number two. No surprise, then, that when iron ore prices rise, BHP shares tend to follow suit.
The industrial metal has recovered from late May lows of just under US$100 per tonne. Yet it’s also been sliding from recent July highs of US$117 per tonne. Iron ore ended July trading for US$107 per tonne.
With China’s steel-hungry real estate sector floundering and Chinese government stimulus measures expected to remain modest, the iron ore price is broadly forecast to slip further from here.
Richard Lu, a senior analyst at CRU International, points to China’s sluggish economic growth when he forecasts the iron ore price could fall back to as low as US$90 per tonne in the months ahead. That kind of fall would throw up some significant headwinds for the BHP share price.
While that kind of sizeable retrace is unlikely to happen just in August, Lu is not alone in his bearish mid-term forecast for the iron ore price.
Commonwealth Bank of Australia (ASX: CBA) mining and energy commodity strategist, Vivek Dhar forecasts weak steel demand from China will see the ore price average $US100 per tonne in the fourth quarter of 2023.
What are brokers saying about the BHP share price?
Analysis by major brokers can also play a big role in determining investor sentiment.
And, as Motley Fool analyst James Mickleboro noted, following BHP’s quarterly results, “a number of leading brokers have retained the equivalent of buy ratings”.
Morgans retained its add rating with a price target of $51.30.
Macquarie kept its outperform rating with a price target of $47.
And Goldman Sachs retained its buy rating with a $45.60 target for the BHP share price.
