BHP at a Critical Point for Iron Ore as they Face Strike Plague

This week on the Talking Wealth, Janine discusses the strike at BHP’s bulk export terminal at Port Headland and why this is critical for iron ore. Headlines often distract investors from what's ahead.

• 0:01Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice. Enjoy.

• 0:20Speaker 01

  Hello and welcome to Talking Wealth. I'm Janine Cox, Senior Analyst at Wealth Within. Today, I wanted to talk about the strike action at BHP's bulk export terminal at Port Hedland, and why this is critical for iron ore. And headlines often distract investors from what's actually going on with the underlying commodities at the time, which becomes really interesting. So even though I'll touch on the strike action, the major focus of this discussion is the iron ore price and what you need to be thinking about. I guess this could affect the strike itself as well, because if the iron ore price

• 0:59Speaker 01

  falls, obviously, BHP's profitability falls. If the iron ore price rises, then the reverse occurs. So depending on contracts that BHP have already got in place. But the interesting thing is that when we're looking at this strike action is that apparently there hasn't been a strike since 2000. So that's a couple of decades ago. It's been relative peace for BHP's Port Headland operations, according to news outlets. Now, they're saying that at the moment, it could cost 40 to 50 million that BHP are going to lose as a result of

• 1:38Speaker 01

  this. BHP is saying that this hasn't really affected their operations, that they've actually got people there on the ground who can actually run the operations, and they're going to be continuing to work into the evenings to get production out. Now, it remains to be seen whether that is really going to affect BHP's bottom line, and by how much. I guess it depends on how long the strike drags out for and what happens with at the terminal. But, you know, we can't really go into that too much, and we really don't know what's going to happen at this stage. And, you know, while workers obviously work hard, and we

• 2:21Speaker 01

  have a lot of students here and graduates who have come through our courses who work for mining companies. And the issue is that it's hard on families, there's no doubt about it because you're flying in, flying out. Sometimes they could be a week at a time, two weeks at a time away from young children in some cases, and it makes it really tough. It's a real test on people. Not only do we have financial tests and issues that come around when you have children, but then to have that, you know, when you're away from them for so long. And there are some people that I talk to that say that, you know, ultimately they would like to be with their families more. So what's the, what's that worth in terms of

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  the price tag on that? And I guess that's why quite a few people who come through, their biggest goal is to actually leave that type of work because they, they, you know, are tired of working the shift hours and the fly in, fly out and being away from their families. So that's another thought. If you're in that boat, then by all means, come and talk to us because we're teaching people how to earn an alternative income or multiple income streams and the stock market can help you do that. The reason I wanted to talk to you about this whole issue with the strike action and BHP is because of what's going

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  on that's not in the media. So it's always what they're not talking about that I'm really interested in at the moment. It's the iron ore price, which has been tracking sideways. Now, I did say that there was a potential for iron ore to head up towards around 120 and possibly up to 140, but there was a risk that if the iron ore price fell back below a hundred dollars, that it could continue to fall. Now, a very critical and important level is 94.48. If iron ore falls below that level, we could be seeing iron ore prices head back towards the $80 mark and possibly lower, depending on how it unfolds when it

• 4:29Speaker 01

  pulls back to those levels. So right now, the iron ore price is at extremely critical juncture. So to have the iron ore price fall at a time where there's strike action, does that make sense? Well, it depends on how much of a skeptic you are. But, you know, to me, it is, it does tie in. And, you know, would it be pulling back the way that it is? There's a lot of things going on around the world that can affect that, not just this strike, obviously. So, you know, there's supply and demand equation going on right now that's weighing on this. But is this the best time for them to be arguing for the case? I would be saying that when the price is going up strongly, that's, you've got a better,

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  a better argument, a better, better bet to get what you want than when the price is just tracking sideways or going down. That's just an observation. But if we see the iron ore price track back up closer to a hundred and ten dollars, then I know that the upside view that I had is more likely to be unfolding. So I've talked about the downside and the upside. You've always got to look at both when you're watching stocks or markets unfold. It's not a question of whether it goes to that level now. It could be that it doesn't go there straight away because there's time involved as well as to when these things can occur. So there is an important level in terms of time at the end of this year.

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  So around December, so it could be November, December or January, that we see an important turn in the, in the price of iron ore. So continue to watch out for that. But it's interesting how the iron ore price has been responding to important analysis applied to the chart. And this is based on price, time and pattern that you've got to be looking at how stocks and markets unfold over time. But you've got to really get a great grasp on how the price analysis can be used to the best advantage when looking at historical ranges or levels and how that really ties into what can unfold and how fast a stock

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  would move to the upside or how it might move to the downside if it continues to fall away. All of these considerations need to be made. And then when you've got a good grasp of price, it's then about understanding pattern and, and how stocks and markets unfold. I think often traders forget about that and they're too busy looking at the short term detail to not pull back and take a really good look, big picture, in a big picture sense. And this is one of the things I'm working through with some of the people I'm mentoring at the moment, is to really have that good understanding of having a good process of

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  an analysis. Anyone can put a couple of levels on a chart, but how can you decide which ones are going to be the most important? And that's really the key here. When you're applying your analysis is that it all starts to to show itself or reveal itself to you, once you've put the correct analysis on the chart. And then it's just a matter of saying, well, okay, if it goes above this level, then I'm buying. If it goes below this level, then I'm out or I'm selling and or short selling if that's what you want to do.

• 7:52Speaker 02

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• 8:15Speaker 01

  You know, it's hit a really important level. So the timing of this couldn't be more crucial, given where we're at right now, because this stock has bounced along a couple of times, a few times, actually, and is now coming back into that same zone yet again. So I think, you know, keep watching this space because you need to watch what's happening with iron ore to get a really good understanding of how fast BHP and Rio's share price could run on the next rise if iron ore keeps going. And that's just a question, isn't it? A big question. Because it's obviously not just, it's a basket of commodities that these stocks

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  are involved in. So it's good to understand the underlying and the direction that these are taking while you're looking at the company's share price. Obviously, over years, BHP, Rio and FMG have increased the output or their production levels quite dramatically. And it'll be interesting to see what AI does to change this whole thing. You know, this is what's happening through many industries, automations taking over, improving productivity and efficiency. Will it take over every job? I don't see that happening, at least in the next five years. Could it do it in 10? Possibly.

• 9:39Speaker 01

  That's, it'll probably really accelerate from here. So, you know, that, could that see other countries become better at what they do? And then competition changes, supply and demand will change over time. That's a fact. So let's just now go back to BHP's share price because we want to see how this ties in. Because remember, I talked about some time ago how BHP and Rio's share prices were likely to increase and they've gone to levels that I expected them to go to. Is there more upside? That's probably what you're wondering. In the short term, no.

• 10:21Speaker 01

  The timing right now in terms of where the share price is likely to go, it's probably short-term downside risk more than anything at the moment. And that's a good thing, even if you own the shares. Because like, when the share price rises, you have to expect that there's a fall on the other side of that. And short-term profit takers come in, they take their money off the table and then wait for the next opportunity. And that's really what's going to set up in the near term. Now, I'm hoping that with BHP and Rio, we'll see the share price settle back to support prior support. It may be more bullish than that. We'll just have to wait and see.

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  But ideally, I'd like to see, we've seen in terms of Rio's share price, and this is something that you might be following more so than BHP, depends if you own this stock and maybe you own this one or you own both. But we've seen a 20% fall in Rio's share price. Now, to decide whether that's normal, you need to go back into history and see what, how it unfolds. And if I go back to where Rio was unfolding prior to the peak of, before the GFC, 24% was probably one of the larger pullbacks in its share price. If we look more recently to the way that Rio's unfolded and as part of this volatile sideways move that occurred.

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  In Rio's share price from around 2021, we can see that some of the pullbacks were much more volatile.

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  And we've seen in the order of 30 or 30 odd percent pullbacks, 20s to 30%. It's probably been typical for more recent years. So there is a possibility for a bit further downside, given that we've seen 20% come off and 25%, let's say, 20 would bring us back to around 140, 142. And that would be a really nice level to see Rio's share price unfold to. So, but if it can hold this current level, 160 was around 160 was a recent low, then it's going to get really interesting from there. But I would like to see a more decent pullback, a bit of time going sideways to build up

• 12:44Speaker 01

  that momentum for the next rise. And same too with BHP. Typically, when we see a pullback in BHP's share price, you generally, if you see a pullback for one month and then it keeps going, that generally doesn't last too much longer. Ideally, you get a couple of months down and then off it goes again. So I'd like to see it pull back into August and then turn around and start moving up again. And if, if we get that nice correction, short term correction back, the question is where will BHP come back to? That's what a lot of people are asking right now. So BHP's only pulled back about 14 and a half percent.

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  It's been much more steady and I would be expecting the pullback to be more in the 20s. So that brings us back to around $50, which is okay. BHP has huge support from its historical levels or that sideways move that happened from 2021 and around that point. So a pullback to there would be considered quite normal and it would bring it back to a more sustainable angle of the trend that occurred or that started to unfold following the low in April 2025. Everything's looking good, so we now have to think about, well, if this strike action continues, could that really have a more significant bearing?

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  Now, if we go back to in 2020, I'm not sure what month it was when the strike action occurred for BHP, but there was a significant pullback after Covid of a couple of months that was in October 2020. But Covid was obviously the more significant low that occurred. Moving forward from that, the next significant one was in September 2021. That was more significant than the one that occurred in October. So I would just suggest that the strike action is not going to have too big an impact on BHP's share price. There are bigger factors at play here, but that's what the media will focus on.

• 14:50Speaker 01

  That's what people who are not necessarily in the know or will listen to our podcasts are going to be focused on. They're going to be looking at what's going on with BHP's share price. How's that going to affect my, my shareholding? This is more about the cyclical nature of BHP and, and the ebbs and flows of its share price. To, to sustain a trend, it needs to do this. So we really want to see that unfold. It could even track sideways for a number of months this year before bursting out of the blocks later in the year or next year.

• 15:26Speaker 03

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• 15:56Speaker 01

  But you know, the fact that it has gone through one of my levels, I'm really excited about. And the next one is up around eighty dollars. Someone asked me, do I see BHP going to, could it go to a hundred? I definitely see eighty or around eighty dollars on the cards. Possibly around ninety dollars or ninety-three could be a important level for BHP. If iron ore really gets going. So this is why it's a really critical time right now to be watching what the underlying commodities are doing. Copper and iron ore, of course, what they're doing.

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  And just really understand what those moves could make or the difference that could make to BHP's share price. So China obviously has a significant bearing on what's going on for BHP. And you know, this is something that you also need to keep an ear to the ground on, just to understand what's happening. So we saw, we've seen lots of talk about negotiations with China.

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  There was an article in The Australian about China's bid to squeeze BHP. On iron ore pricing backfired. And it's posting higher, higher realised prices. This is during the strike. So they're pumping up BHP in terms of the way that it's handled itself. And then other articles are just focusing on what's going on with the strike. There's one from Michael West Media that's talking about what's happened in the Pilbara. And what the, the union are asking for. And their stoppage, so they've called an eight hour stoppage.

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  So the action's expected to run until ten PM, they've said, so.

• 17:56Speaker 01

  These are all interesting facts, as I mentioned, but just remember, come back to the price chart. If you're an investor, even if you are a long-term investor, and you're thinking that you need to be reading these articles and be on top of this, you don't. You just need to know what rules you would use to sell if ever you had to sell BHP, which that day will come. But for now, BHP looks fantastic. It's respecting all of the trends. Get a good understanding of trends. Get Dale's book. Learn how to just go into your broking website and apply a trend line to a monthly chart, print off one or just use it

• 18:39Speaker 01

  on the screen. They've got trend lines there. The tools are all there for you, not to do more complex analysis, but just for some very simple application of just applying the lines. So grab his book, have it there by your side, go into the chart and apply the lines and see whether you've got anything to be concerned about. And, you know, medium to long-term investors, you don't have to worry right now because BHP is in this beautiful trend. It's gone to a new all-time high. We know that when stocks or markets go to a new all-time high, they often pull back. But it's what it does after that pullback that's really important for your medium to long-term outlook. So this is why you need to be really watching it and paying attention

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  to the price more so than than the action. The news headlines are interesting because you can actually look at the chart and see, well, did that really do anything to disrupt BHP's share price? They make out like it will, but that remains to be seen. And and history indicates that that's not necessarily the issue. So where do we expect it to come back to? As I said, around 20, 25%. And from that point, if it comes back to $50, could the stock double? Sure. You know, I'd be saying to you that it's possible that BHP's share price could go up

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  somewhere in the order of 70% from that low, if it turns around and then really confirms that that the angle of the existing trend is intact. And I'm talking about the more medium term trend that we've got in place, which started from the low in March 2025. For those of you students who are out there, you will already have your trend line on the monthly chart underneath these lows and waiting for that next move to see where the BHP share price comes back. But it's done this historically many times before. We can go back to lows, the low in 2016, which is a significant

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  low for BHP. I was having a review of some analysis that was done by someone I'm mentoring at the moment on BHP. And that forms a very important pattern, that pullback. BHP is really a cyclical stock. It moves in a very repeatable pattern that you can follow. And that's the great thing about BHP. So where would the next significant low form? Well, it's quite possible that the next significant low will be somewhere around 2028, 2029.

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  You know, ideally a top somewhere in 2028. That's what I'm thinking at this point, possibly in the first quarter of 2028, around about there at this point. But when we get these pullbacks that come, that actually helps us to firm up future turning points on any stock or market. So just bear that in mind whenever you're looking at BHP, if you're looking at the chart, follow the trends. The trend is your friend, as they always say. And if you're thinking about that you'd like to learn how to trade and learn how to buy and sell, then having some really good rules is so important because it's

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  actually going to enable you to choose when to buy and sell. When are the best times to buy BHP? When are the times not to be in it? The chart gives you really good information on all of that. And a lot of traders underestimate the benefit of that monthly chart and what it can tell you. And they're too busy looking at daily charts that they really miss what's going on. I don't know how many times I've spoken to people that tell me that they're trading on daily charts. And then they realise that the stock price continued to rise and they missed the best part of the run. Because maybe they just tried to get in near bottoms. And then the stock has an initial rise, which it often will pull back.

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  And then as part of that pullback, they're getting out thinking, I've made my money. And then the stock takes off again and then they don't know how to get back in again. The great thing with BHP is this is a stock that you could be buying and selling on a long term timeframe. On a monthly chart, but those entries, once they occur, they're only going to be provided for a certain time. And then the trade length becomes shorter. You've got to expect that at some point, it will be that the trade might only be three or six months in duration. Before you need to consider that something's changed more dramatically. So, and I can tell you that just looking at history shows the length of the trends. That's what it tells you.

• 23:32Speaker 01

  You can see that there was a rise from 2003, mid 2003. It went up to a high in mid 2006 or around then pulled back over around six months. And then continued to run up for further eight months or so into November 2007. That was near the end. So from 2003 to 2007, you're right on the edge of a big pullback coming. And then we saw a rise from November 2008. It went up all the way to test that prior high mate. It was around April 2011 was the high, but everything changed after that.

• 24:13Speaker 01

  So you know, that period of time, that's probably about two, two and a half years. And, and that's a decent run on BHP. Sometimes you get these really long ones, like the one I mentioned before, the GFC. So we had a run from two thousand and sixteen, it rose all the way up into two thousand and nineteen. That's about three years, but it doesn't always run that long. After COVID, March twenty twenty, the stock moved up, moved up to twenty twenty three. So it's around that three year mark. So if we, if we say that, okay, now we're April twenty twenty five, we could be up into the end of twenty twenty seven or, or early twenty twenty eight as part of the next high for BHP. How volatile it gets to the top and whether you can actually stay in

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  with your rules, how much you lose off the top, all of those things are considerations that you have to make before you actually enter. Not once you're in, you've got to be working out and formulating how these things, how the stock's likely to unfold. You've got to know how much profit you potentially could make. What's the upside and thinking that when it unfolds and it pulls back, I've got to have a rule to get out? And what am I going to wait for? How much am I prepared to give away off the top? And what am I prepared to risk when I go into the trade in the first place?

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  You know, does it need to get to, do I need to be really confident of it getting to ninety dollars to justify the risk that I'm taking, which is my stop loss or what I'm prepared to lose when I get in. So all of these considerations need to be made at the start. This is a really great stock to start with. There's stocks, fantastic stocks in the top twenty that'll teach you, that you can use to, to learn everything you know. You need to know about how stocks and markets unfold. And a lot of that you're going to find from the monthly chart. And people don't, they underestimate the benefit of that, you know, not really realising the value of what they're getting, which for what you're paying hits so, so much more.

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  Now, if we look at how BHP unfolds and shorter timeframes than that, if we think, okay, in January two thousand and sixteen, it rose until January two thousand and seventeen. That's about twelve months. Now, what have we seen so far? The low was April twenty twenty five. We're into July twenty twenty six now, and we haven't seen a decent pullback. So this is why you know that there's a probability that it's going to pull back. And for how long could be a couple of months, could be two or three months. Sometimes it's more than that. If I look back here to June two thousand and seventeen, around about there, that was actually a low after five

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  months down. But generally, it's sort of around two months, three months where BHP pulls back and then gets going again. So you don't usually have to wait too long for BHP to make its move, except all of that did change in twenty twenty one. But all that pent up energy in terms of the share price is actually unfolding now because it's sprung out of the blocks and that can happen, and not just on a BHP chart. But if we look back in history, back to around the two thousands, we saw this really weird, almost a sideways consolidation, kept on rising a bit, but then coming back, rising a bit and coming

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  back. And then eventually had one of the best runs it had from mid two thousand and three. So, you know, this is why these times right now are really important. It's important not to be distracted by news that comes out about strike action or anything else, even news on China. If that comes out and helps the share price to pull back, I'm always saying that's great because that's what we're looking for. What's going to cause it to come back? Our analysis tells us that it's likely to, but the rest is just a matter of interest. It's not material like what you'll see on the chart, if that makes sense. So.

• 28:31Speaker 01

  Anyway, I hope you've enjoyed my discussion today on BHP and talking about what we can see on the chart and the iron ore price. And we still need to stay tuned. If something changes, I'll be sure to update you. Continue to learn as much as you can. If you haven't bought that book yet, make sure you go to the website and get it. If you've been umming and ahhing about doing the course, you're crazy. Just go and do it. This is a once in a lifetime thing. And now is such a great time to be learning. So I wish you all the best with that. And I look forward to potentially chatting with you at some point down the track. Take care. I'm Janine Cox, Senior Analyst at Wealth Within. Bye for now.

• 29:15Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice.