BHP Group Faces Potential $2 Billion Losses Amid Pricing Pressures
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 29 2026
0mins
Should l Buy BHP?
Source: seekingalpha
BHP Group's stock has reached a 52-week high despite facing significant challenges in the market.
The company is grappling with potential losses of up to $2 billion due to China's restrictions on Jimblebar iron ore imports, which are driven by widening discounts and plunging lump premiums. Additionally, BHP is negotiating annual contract terms with China Mineral Resources Group (CMRG), which could lead to approximately $1 billion in annual losses from incremental discounts on its major iron ore fines products. The 80% drop in premiums for Newman lump products adds another $1 billion in revenue pressure, reflecting intensified market competition.
Despite these challenges, BHP is optimizing its product placement and distribution channels to preserve operational flexibility, indicating a commitment to expanding sales in other markets.
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Analyst Views on BHP
Wall Street analysts forecast BHP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for BHP is 54.88 USD with a low forecast of 48.00 USD and a high forecast of 68.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
2 Buy
1 Hold
1 Sell
Hold
Current: 69.100
Low
48.00
Averages
54.88
High
68.00
Current: 69.100
Low
48.00
Averages
54.88
High
68.00
About BHP
BHP Group Limited is an Australia-based resources company. The Company is a producer of commodities, including iron ore, copper, nickel, potash and metallurgical (steelmaking) coal. It is focused on offering a range of resources, which provides copper for renewable energy; nickel for electric vehicles; potash for sustainable farming, and iron ore and metallurgical coal for the steel needed for global infrastructure and the energy transition. Its segments include Copper, Iron Ore, and Coal. Its Copper segment is engaged in mining of copper, silver, zinc, molybdenum, uranium, and gold. Its Iron Ore segment is engaged in mining of iron ore. Its Coal segment is engaged in mining of metallurgical coal and energy coal. The Company is also focused on operating Olympic Dam, Prominent Hill, and Carrapateena underground copper-gold mines in South Australia. Its operations are situated in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Annual Contract Negotiations: The company is currently negotiating annual contract terms with China Mineral Resources Group (CMRG), which could lead to approximately $1 billion in annual losses from incremental discounts on its major iron ore fines products at spot prices.
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See More
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- Global Mineral Cooperation Agreement: The US and EU committed to a deal within 30 days to identify cooperation areas, stimulate demand, and diversify critical mineral supply, aiming to prevent supply chain disruptions and promote research and innovation, reflecting the strategic collaboration of three major economies in global mineral supply chains.
- Current Control of Critical Minerals: China controls 60% to 90% of the global critical mineral processing market, particularly in missile defense and energy infrastructure, which creates vulnerabilities for the US and its allies, compelling them to take action to ensure supply security.
- US Policy Shift: President Trump launched the $12 billion Project Vault to stockpile critical minerals, while Congress passed the Critical Mineral Dominance Act, marking a significant step in breaking China's control over mineral supply chains and expected to boost domestic mining and refining sectors.
- Surge in Copper Demand: Copper demand is projected to rise by 50% to 42 million metric tons by 2040, while supply is expected to decline by 7%, leading to a 10 million ton shortfall, particularly driven by emerging technologies like AI and electric vehicles, intensifying the demand for copper.
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- Software Sector Decline: The S&P Software and Services sector dropped nearly 4% on Tuesday, with Cognizant plummeting 10%, reflecting investor concerns over the impact of artificial intelligence, which could undermine confidence in software companies and affect their growth potential moving forward.
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- Program Expansion: BHP has selected 10 early-stage exploration and technology companies for the 2026 Xplor program, marking the largest cohort since its inception, reflecting the company's commitment to innovative exploration methods aimed at enhancing mineral discovery efficiency.
- Multidisciplinary Collaboration: The selected companies include junior exploration firms, geoscience organizations, and technology teams, emphasizing the intersection of geological insights, data, and emerging technologies, which is becoming central to mineral discovery.
- Innovative Technology Applications: Companies like RadiXplore and Mineural are leveraging artificial intelligence and modern geological data analytics to improve mineral target identification efficiency, indicating BHP's proactive adoption of new technologies to tackle complex geological environments.
- Future Development Potential: BHP Exploration Officer Tim O'Connor noted that new tools and data are rapidly changing early exploration methods, and the Xplor program provides valuable opportunities for the company to learn alongside these innovators, suggesting a broader potential for future mineral discoveries.
See More
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- Program Expansion: BHP has selected 10 early-stage exploration and technology companies for the 2026 Xplor program, marking the largest cohort since its inception, reflecting the company's commitment to innovative exploration methods aimed at enhancing mineral discovery efficiency.
- Interdisciplinary Collaboration: The selected companies include junior exploration firms, geoscience organizations, and technology teams, emphasizing the intersection of geological insights, data, and emerging technologies, which enhances the understanding of mineral systems and increases exploration success rates.
- Innovative Technology Application: Companies like RadiXplore and Mineural are utilizing artificial intelligence and modern data analytics to improve the efficiency of mineral target identification, indicating BHP's proactive adoption of new technologies to address complex geological environments during exploration.
- Global Perspective: Participants in this Xplor program hail from various countries, including Canada, Australia, and South Africa, showcasing BHP's strategic pursuit of collaboration and innovation on a global scale, aiming to drive sustainable mineral resource development through diverse technologies and expertise.
See More
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- Import Restrictions Impact: BHP Group faces potential losses of up to $2 billion due to China's restrictions on Jimblebar iron ore imports, primarily driven by widening discounts and plunging lump premiums, indicating a significant shift in market demand.
- Annual Contract Negotiations: The company is currently negotiating annual contract terms with China Mineral Resources Group (CMRG), which could lead to approximately $1 billion in annual losses from incremental discounts on its major iron ore fines products at spot prices.
- Lump Product Discounts: The 80% drop in premiums for Newman lump products adds another $1 billion in revenue pressure, reflecting intensified market competition and the challenges in maintaining pricing power.
- Market Strategy Adjustments: BHP stated it is optimizing product placement distribution channels and taking actions to preserve operational flexibility, which has impacted realized prices; however, the company remains committed to expanding sales in other markets, demonstrating resilience in facing challenges.
See More
