What happened to BHP’s share price?
BHP Billiton Ltd. [ASX:BHP] is down 82 cents, or 2.63% after being down as much as 5.6% this morning.
Why are BHP shares down?
The stock is trading ex-dividend and will pay a 79.14 cent dividend on March 31. But the dividend wasn’t the only reason for the fall — energy stocks across the board are down 1.7% today.
Overnight, commodities had a tough session. The iron ore price fell to six year lows in the face of an oversupply and Brent oil lost 4%.
Additionally, Chinese trade data from the first two months of the year suggest that volumes of iron ore and coal shipments are no longer growing strongly. There’s speculation that Chinese demand for Australian iron ore could fall by up to 10% this year.
This goes against long held belief, or maybe hope, by the Australian government that demand will continue rising into the next decade.
What now for BHP Billiton Ltd.?
BHP’s iron ore President Jimmy Wilson wasn’t fazed, saying that recent demand for iron ore from China’s manufacturing sector has been above the company’s expectations. He added that the China’s property market may be set for an uptick.
The company is continuing cost cutting in the face of lower commodity prices.
for The Daily Reckoning Australia