BHP Group’s exposure to copper prices has intensified after the commodity surged 16% on the London Metal Exchange this year, driven in part by concerns over potential U.S. tariffs. The rally, however, risks stalling as market distortions between LME and COMEX contracts signal shifting fundamentals.
Physical copper has been accumulating in the United States in anticipation of Section 232 tariffs, pushing prices higher. Analysts warn that if the tariff-related premium erodes, copper could retreat to structural support levels, undermining the gains seen in 2024.
The commodity’s rally has been particularly significant for BHP, where copper has overtaken iron ore as the company’s largest revenue source for FY2026. Copper now accounts for 54% of BHP’s projected EBITDA for the fiscal year, up from iron ore, highlighting the miner’s growing reliance on the red metal. Any sustained weakness in copper prices could pressure BHP’s earnings and investor sentiment, given its outsized exposure to the market’s movements.
