MELBOURNE, July 17, 2026, 09:05 AEST
- BHP ended Thursday at A$59.14, falling 2.34%, though the stock stayed 4.0% higher than its July 9 close.
- FY27 copper guidance indicates a midpoint decline of 11.7%, with Escondida responsible for 92.7% of this projected deficit.
- Labour negotiations at Port Hedland will continue on July 21, following a decision by electrical workers to endorse expanded strike actions.
BHP Group Ltd ASX:BHP faces a more acute copper challenge heading into Friday. The company’s midpoint guidance for FY27 signals an 11.7% drop in production from FY26 levels. Nearly 93% of that estimated deficit is attributed solely to Escondida.
This is significant as BHP considers copper a key driver of long-term value. While iron ore volumes are expected to remain largely steady in the coming year, the same cannot be said for copper.
The ASX stayed in pre-open mode at the dateline, with continuous trading set to commence at approximately 10:00 AEST. BHP finished Thursday’s session at A$59.14, falling A$1.42.
The decline pared back a solid weekly recovery, but shares remained 4.0% higher than their July 9 close. This indicates that Thursday’s report adjusted expectations while preserving much of the recent gain.
The midpoints of the guidance outline the production breakdown:
| Production measure | FY26 actual | FY27 guidance midpoint | Change |
|---|---|---|---|
| Total copper, thousand tonnes | 1,952.8 | 1,725 | -11.7% |
| Escondida copper, thousand tonnes | 1,261.2 | 1,050 | -16.7% |
| Total iron ore, million tonnes | 264.7 | 266 | +0.5% |
| WAIO, 100% basis, million tonnes | 291.2 | 292 | +0.3% |
Midpoints and percentage changes are derived from BHP’s stated ranges; they do not represent probability-weighted forecasts from the company.
Escondida’s implied reduction stands at 211,200 tonnes at the midpoint, while BHP’s overall calculated decrease amounts to 227,800 tonnes. As a result, the Chilean site accounts for 92.7% of the difference.
Ore quality is responsible. BHP forecasts Escondida’s concentrator feed grade will be around 0.70% in FY27, representing a decline of approximately 22% from the 0.90% recorded in FY26.
Stronger prices helped offset the FY26 drop in volumes. BHP achieved a 35% jump in its copper price to US$5.74 per pound. CEO Brandon Craig stated the group had “produced around 2 Mt of copper” for a second year running. All operated assets are projected to stay within unit-cost guidance. BHP
Iron ore provided balance for operations. Total output hit an all-time high of 264.7 million tonnes. Production in Western Australia stood at 291.2 million tonnes on a 100% basis, and realised prices increased by 3%.
BHP has given the green light to a US$900 million investment for the Ministers North iron ore project. Once fully ramped up, the site is expected to deliver approximately 20 million tonnes of ore each year. Initial production is targeted for fiscal year 2029.
Labour risks have emerged as a concern for the previously stable iron ore outlook. On Thursday, hundreds of workers at Port Hedland participated in an eight-hour strike. In a separate move, 97.5% of high-voltage employees voted in favour of stoppages that could last up to 24 hours. The port processes around $80 million worth of BHP ore per day.
Negotiations are set to continue on Tuesday, July 21. BHP has earlier stated that safety at its operations will be ensured through contingency measures. Investors are expected to monitor shipping levels closely along with any potential escalation in industrial action.
BHP anticipates final figures will be confirmed on August 18, with preliminary estimates indicating net debt of approximately US$9 billion. The company also projects a US$2.3 billion impairment charge related to the Jansen potash project.
Risks involve extended port shutdowns, softer copper prices, and further declines in ore grade. Production at Carrapateena may also be impacted for as long as eight weeks following the conveyor breakdown.
The math is straightforward. Iron ore ensures steady volumes, but short-term copper profits depend more heavily on pricing and managing expenses. The upcoming test is Tuesday’s labour negotiations. Full-year results will be released on August 18.
