UPDATE:BHP Sees Demand But Says Global Recovery Could Stall
October 21 2010 - 11:47AM
Dow Jones News
Mining titan BHP Billiton Ltd. (BHP) said Thursday demand for
its products continues to grow but the global economic outlook is
still fragile.
"It is still possible that the recovery could stall," Jac
Nasser, BHP's chairman said at the company's annual general
meeting.
Nasser said the European Union, U.S. and other developed
countries still face ongoing challenges with regard to fiscal and
financial stability.
But a structural shift in the global economy toward China and
other emerging markets--including India, Russia, Brazil, and more
recently Indonesia, Mexico and Turkey show promise for future
growth as the forces of industrialization, urbanization and
improved living standards continue to grip developing economies, he
said.
BHP's chief executive Marius Kloppers said "despite our overall
modest outlook for the world economy, we are encouraged by the
incremental demand for our products driven by these emerging
economies."
He said a pull back in investment by competitors during the
global financial crisis created a supply lag which resulted in
favorable supply-demand conditions.
Furthermore emerging economies are growing at about three times
the rate of developed countries, he added.
BHP is operating most of its assets at full capacity and
reported a 6% rise in iron ore output during the third quarter
compared with the same period a year earlier. BHP's copper output
rose 3% during the same period.
Nasser said commodities prices remain volatile due to concerns
about the overall health of the global economy but he noted that
BHP's diversified portfolio has reduced its exposure to price
volatility.
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com