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Is the BHP (ASX:BHP) share price a buy in January?

The BHP Group Ltd (ASX: BHP) share price finished 2023 at a high point of over $50. Is this ASX mining share a good buy right now?

BHP mines a huge amount of iron each year. It also has a growing presence in copper and nickel, while also being a coal miner. The business is working on a potash project in Canada.

Is the BHP share price a good buy?

Incredibly, the iron ore price has risen to around US$140 per tonne, which has gone against many predictions that the iron ore price would decline.

China is the key buyer of iron ore, and surprisingly the demand from the country has been strong despite the difficulties faced by the Chinese real estate and construction sector.

But, iron ore demand is being supported by areas like (electric) vehicle manufacturing and infrastructure in China.

We can’t control what iron ore prices are going to do – it could keep rising or fall from here.

But, when it comes to mining businesses I think it’s a good idea to remember that classic investment advice “buy low, sell high”. I have no idea when the iron ore price is going to fall again, it could be many months or even a year or two. But, I believe the iron ore price will drop at some point, it’s just a matter of time, and being patient.

As you might be able to tell, I’m not optimistic that this is a good time to buy BHP shares because of the elevated price, though bigger dividends may be on the way.

Why I’d invest at the right price

It seems BHP is one of the best in the world at what it does, and the portfolio of commodities that it has exposure to is well-suited for a decarbonising global economy. The company also has ambitions to grow its iron ore and copper production, which would benefit profit and BHP shares if the commodity prices are fairly attractive.

I believe we can make good money with BHP, but only if we buy at the right time.

The world will continue to need steel and copper for many years in my opinion, and countries like India and China could help the demand of that.

If the BHP share price were below $40, I’d definitely think about investing. If that happened, the future dividend yield could be very appealing. I like BHP that aims to pay a satisfactory dividend to investors each year.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
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