BHPB 'solid'

Production and Markets

BHP Billiton has published its production report for the year to end-June. The company described annual production as "solid, despite weak and volatile demand conditions and weather-related interruptions".

Highlights included quarterly production that increased for 12 major commodities, including metallurgical coal, petroleum, copper and energy coal. BHPB said that its operations are "well positioned to respond to demand recovery when it occurs".

Annual production records were achieved for petroleum, copper cathode and iron ore, with notable achievements at Western Australia Iron Ore, North West Shelf and Saraji (all Australia),
the Alumar refinery (Brazil), Cerrejon Coal (Colombia) and Zamzama (Pakistan).

BHPB described the 2009 financial year as "very challenging, with significant demand contraction exacerbated by dramatic movements in inventory levels". In the context of this environment, BHPB describes its operational performance as "solid".

The company said that "in the short term we believe underlying demand trends are still being masked by de-stock and stocking activities across the value chain. China inventory build is essentially complete, while we are now seeing evidence that restocking has commenced in North America, Europe and Japan. However, commodity prices will be influenced by supply responses due to latent capacity currently existing in the industry."