BHP Group faces heightened price risk in copper as a recent rally tied to U.S. tariff concerns shows signs of fading, potentially pressuring the miner’s earnings outlook.
Copper prices have climbed 16% on the London Metal Exchange this year, supported in part by speculation over potential Section 232 tariffs that could restrict imports into the United States. The rally has created a divergence between LME futures, which are in backwardation, and COMEX contracts, which remain slightly in contango—a pattern explained by physical copper stockpiling in the U.S. ahead of possible trade restrictions.
Analysts note that if the tariff-driven price premium dissipates, copper could retreat toward structural support levels. The metal has overtaken iron ore as BHP’s largest revenue contributor, underscoring the company’s growing exposure to copper’s price volatility.
BHP’s financial projections for fiscal 2026 indicate copper will account for 54% of its projected earnings before interest, taxes, depreciation, and amortization (EBITDA). The miner’s reliance on copper has intensified as global demand for the red metal accelerates, particularly in sectors tied to energy transition and electrification.
Market watchers caution that while short-term price strength persists, the sustainability of the rally hinges on trade policy developments and broader macroeconomic conditions.
