The BHP Group Ltd (ASX: BHP) share price has ended the week in negative territory.
At Friday’s market close, shares in the world’s largest miner slipped 3.39% to $42.52. This represents a fall of 8% to when its shares finished trading at the end of last week.
Let’s take a look at what’s weighing down the miner’s shares.
What’s happened to BHP shares?
There are a couple of reasons as to why the BHP share price sunk to a 3-week low today.
Firstly, the S&P/ASX 200 Materials Index (ASX: XMJ) backtracked 2.78% to 16,443.4 points on Friday. When looking at the past week, the index is down a sizeable 8.64%.
The sector represents 39 of the largest companies that specialise in mining, forest products and construction materials.
It appears the general negative sentiment on the BHP’s home sector is weighing down its shares.
Shares in fellow peers, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) also closed the day in the red by 4.20% and 5.25%, respectively.
In addition, the price for iron ore is fetching at US$131.50 per tonne, down 0.75% for the day as well as touching a 3-week low.
Dragging down the price of the crucial steel-making ingredient is China’s bold move to have more influence over the commodity.
As reported in the Australian Financial Review, the Asian powerhouse is looking to set up a cartel of iron ore buyers. This would centralise purchases as well as help bring iron ore prices down.
However, the big three Australian miners aren’t convinced as China is littered with many small-time players across the countryside. Regulating this and getting them to come to the table is likely to prove extremely difficult for the Xi administration.
Only time will tell as China wants to have this initiative wrapped up by the end of this year.
Since the beginning of 2022, the BHP share price has travelled sideways to register a gain of 15% so far.
Although, when looking further back to the last 12 months, its shares remain flat for the period.
Listed as the biggest company on the ASX in terms of market capitalisation, BHP is roughly valued at $215.25 billion.
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