You only have to look at the announcement from Macarthur Coal today (and countless other commodity exporters for that matter), to see that earnings are going to be massively hit at BHP.
The majority of increased profit over the last 5 years at BHP has come about as a result of Commodity price rises not production volume increases.
So what happens when both prices drastically fall and production is cut?
The fundamentals for BHP are very poor for at least the next 1-2 years, and previous commodity cycles would suggest much longer than this.
At the current price it would appear to be a massive risk being long.
I would be interested in any bulls explaining their reasoning for staying long - as i cant see a more obvious trade in the market at the moment
tuesday slide, page-4
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Last
$38.81 |
Change
-0.530(1.35%) |
Mkt cap ! $196.9B | |||
| Open | High | Low | Value | Volume |
| $38.65 | $38.86 | $38.46 | $405.6M | 10.48M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 8 | 13092 | $38.80 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $38.84 | 500 | 1 |
View Market Depth
| Last trade - 16.10pm 12/09/2024 (20 minute delay) ? |
| BHP (ASX) Chart |