BHP Billiton needs to maintain its focus on meeting the needs of its Chinese customers while other international markets recover more slowly, chief executive Marius Kloppers said yesterday.
“China has been the major and sometimes only source of demand for commodities in 2009,” Kloppers said yesterday at BHP’s annual general meeting held in Brisbane.
“We have no reason to change our long-held view that Chinese growth will continue and will continue to be resources-intensive.
“We will maintain our focus on long-term growth in production capacity to meet these needs.”
Kloppers said that BHP has been surprised at the potency of parts of the Chinese industry.
“One element that continues to surprise us is the resilience of the Chinese steel sector,” he said.
According to Kloppers, this strength has gone against other international markets.
“Outside of China, we saw steel capacity usage fall to 50% in the three major steel markets of the US, Europe and Japan.”
Kloppers said that despite a more positive steel market beginning to emerge, most are continuing to only warily move ahead.
“We are now seeing the usage rate climb as the first evidence that restocking in the major economies has commenced,” he said.
“However, the restocking in the US and Europe is progressing very cautiously.”
Meanwhile, outgoing chairman Don Argus said the company remained committed to its iron ore joint venture with Rio Tinto.
According to Argus, both companies hoped to complete a binding agreement by the 5 December deadline and submit the joint venture applications to regulators by the end of the year.
Shareholders would then be able vote on the transaction next year.
BHP and Rio signed a nonbinding agreement to merge their WA iron-ore assets in June.