BHP Billiton has reaffirmed its full-year production guidance across all its segments, other than copper, as it sees early signs of a recovery in the commodities markets.
The resources giant on Wednesday reported September quarter production largely along expected lines, with steady output for iron ore and metallurgical coal, but lower volumes in petroleum, copper and thermal coal.
"We have seen early signs of markets rebalancing," chief executive Andrew Mackenzie said.
"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 on the back of plummeting oil and iron ore prices earlier this year, but pledged to lift volumes across its divisions as it remained confident about the longer-term outlook for its commodities.
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Earlier in October, the company renewed expansion plans for its petroleum business, with a recovery in oil prices and cost reductions making investments in projects more attractive.
On Wednesday, BHP said it produced 58 million tonnes of iron ore in the three months to September 30, unchanged from a year earlier.
It expects to achieve its full-year production guidance of between 228 and 237 million tonnes, and said the two-year rail renewal and maintenance program at its Pilbara operations in WA was progressing on schedule.
Petroleum production dropped 15 per cent in the quarter to 55 million barrels of oil equivalent, with the bulk of the decline reflecting lower drilling activity in the US shale business, while natural field decline in its conventional assets accounted for the rest.
Copper production in the September quarter fell six per cent to 355,000 tonnes. BHP maintained its annual target of 1.66 million tonnes, but said this would be subject to the review of guidance at its Olympic Dam facility in South Australia, which suffered a shutdown following the recent state-wide power outage.
Thermal coal production was down four per cent to 6.88 million tonnes, while metallurgic coal production was up one per cent at 11 million tonnes.
"Overall, the quarterly production was in line with our estimates, with the exception of copper which reported a six per cent decline year on year," RBC Capital Markets' mining analyst Paul Hissey said in a note on Wednesday.
