Why BHP Billiton is optimistic about commodities
BHP Billiton is confident that commodities markets will recover and has reaffirmed the majority of its full-year production guidance segments, although it is holding off on copper.
The mining giant reported that its September quarterly production was in line with expectations; output for iron ore and metallurgical coal was steady, but the company did report lower volumes in petroleum, copper and thermal coal.
BHP Billiton CEO Andrew Mackenzie said “We have seen early signs of markets rebalancing. Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term.”
BHP posted a record full-year loss in August off the back of tumbling oil and iron ore prices, but promised to boost volumes across divisions as it remained confident about the longer-term outlook for its commodities.
At the start of October, the mining company announced that it would renew its expansion plans for its petroleum business; recovery in oil prices and cost reductions made project investments projects more attractive.
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SOURCE: [Perth Now]
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