MELBOURNE, July 16, 2026, 09:09 AEST
BHP will rely on copper sticking near June quarter prices as it faces a 12% drop in output for fiscal 2027. Using Thursday’s production forecast, BHP needs an average copper price near US$6.50 a pound, a touch below the US$6.53 a pound it said it got in the fourth quarter.
The threshold is 13.2% higher than BHP’s FY2026 average price of US$5.74 per pound. Copper made up 51% of group underlying EBITDA in the first half and brought in a record US$8.0 billion.
BHP said it turned out 1.9528 million tonnes of copper in FY2026, off 3%. The miner set guidance for FY2027 at 1.65 million to 1.80 million tonnes, with the midpoint at 1.725 million tonnes, cutting expected output by 227,800 tonnes. Iron ore hit a record with 264.7 million tonnes; guidance now points to a midpoint of 266 million tonnes.
| Production measure | FY2026 actual | FY2027 guidance midpoint | Change |
|---|---|---|---|
| Group copper | 1,952.8 kt | 1,725.0 kt | -11.7% |
| Escondida copper | 1,261.2 kt | 1,050.0 kt | -16.7% |
| Copper South Australia | 320.7 kt | 305.0 kt | -4.9% |
| Group iron ore | 264.7 Mt | 266.0 Mt | +0.5% |
FY2027 numbers use BHP’s guidance midpoints. Percent changes are from company data.
BHP says Escondida is behind 211,200 tonnes, or around 93%, of the group’s projected midpoint decline. The miner expects concentrator feed grade to fall from 0.90% in FY2026 to about 0.70% for FY2027. Even with record mining and record concentrator throughput, the company said it wasn’t enough to make up for falling grades last year.
Chief Executive Brandon Craig said, “Cost control was particularly strong, with every asset expected to be within unit cost guidance.” BHP is expecting Escondida, Spence and Copper South Australia to end FY2026 at the low end of their cost ranges, which would help if copper prices fall. BHP
| Copper price test | US$/lb | Change from FY2026 average |
|---|---|---|
| FY2026 average realised price | 5.74 | Baseline |
| Q4 FY2026 realised price | 6.53 | +13.8% |
| Price to cover midpoint volume loss | 6.50 | +13.2% |
BHP said its reported realised prices are unaudited and still provisional. The US$6.50 number just comes from a basic calculation that uses production instead of sales—it’s not a revenue or profit forecast, and it leaves out mix, shipment timing, treatment fees and any later price changes.
BHP’s price exposure also affects how earlier sales get settled. As of June 30, the group still had 429,000 tonnes of copper sales unsettled, marked at a weighted price of US$6.07 a pound. Those final prices will be locked in during FY2027. For every 10-cent price swing up or down from here, gross value changes by about US$95 million, before tax and adjustments. That open position represents around 22% of expected FY2026 copper output.
BHP’s preliminary net debt came in near US$9 billion on June 30, down from US$14.686 billion at December’s end and just under its US$10 billion to US$20 billion target range. The update included about US$4.3 billion in proceeds from the Antamina silver-streaming deal, an expected Jansen impairment of US$2.3 billion and around US$5 billion spent on capital and exploration in the second half. Final accounts are due in August.
BHP is facing a planned work stoppage at Port Hedland on Thursday. Several hundred employees are set to walk off the job for eight hours starting at 2 p.m. local time. The hub handles about US$80 million of iron ore for BHP every day. The company says it has contingency plans. Talks are due to restart on July 21. Copper grade and price remain the bigger earnings driver for the year.
Rio Tinto Limited ASX:RIO, which also produces iron ore and copper, kept its 2026 copper target unchanged at 800,000 to 870,000 tonnes. First-half output was up 1% at 442,000 tonnes. BHP has flagged a bigger near-term drop, with double-digit volume cuts expected in fiscal 2027. Reporting dates and assets differ.
The price test cuts both ways. Copper prices close to BHP’s provisional Q4 level could make up for some of the lost volume if costs and product mix stay steady. If prices slip back to the FY2026 average, the entire gap is exposed. A conveyor issue at Carrapateena could keep that mine offline for up to eight weeks. If the Port Hedland dispute drags on, BHP could see pressure on its usually steady iron ore volumes. The company’s August 18 results will be the first chance to see if less debt and tight costs are enough.
