The worlds largest miner is rarely far away from MM’s notes, and we last looked at it a few months ago, Here after its solid March quarter trading update. With iron ore trading above $US110, and Cu looking increasingly strong, BHP is in a great position to surprise on the upside, and we see no reason to reduce our position (s) at this stage.
At MM, we believe we are almost certainly in a Supercycle for copper, a commodity that sits at the intersection of the energy transition and AI infrastructure buildout, and BHP has shown its class in transitioning itself over the last decade to, firstly, a copper company. Whether oil, iron ore, and bulk commodities join them depends on China’s policy response, India’s ongoing economic expansion, and the overall health of the global economy.
We believe the fifth Commodities Supercycle is real, it just won’t be the broad, rising-tide-lifts-all-boats cycle of the China era. It’s going to be narrower, more selective, and more driven by the physical constraints of the energy transition than by a single country’s industrialisation. For us, that means picking the most structurally compelling commodity exposures, with copper and uranium two of our favourites at this stage.
- We can see BHP powering above $60 in the coming months, if not weeks, assuming the Iran war is resolved: MM owns BHP in its Active Income and Active Growth Portfolios.
MM is long and bullish BHP around $56
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