BHP Says Velocity of China Recovery ‘Surprising’

Nov. 26 (Bloomberg) -- BHP Billiton Ltd., the world’s largest mining company, has been surprised by the rapid recovery in China’s economy after the global financial crisis curbed prices and cut demand.

“Over the past six months, we have seen quite a rebound in commodity prices and in particular, the velocity of the recovery in China has indeed been surprising,” Marius Kloppers, 47, chief executive officer of the Melbourne-based company, said today at the company’s annual meeting in Brisbane, Australia. “One element that continues to surprise us, however, is the resilience of the Chinese steel sector.

Commodities, as measured by the Reuters/ Jefferies CRB Index of 19 raw materials, have gained 21 percent this year, reversing a 36 percent decline last year. Steel demand in China may rise 12 percent next year on booming property and auto demand, China International Capital Corp. said this month.

“We have no reason to change our long-held view that Chinese growth will continue and will continue to be resources- intensive,” Kloppers said.

BHP gained 0.8 percent to A$41.50 at 11:53 a.m. Sydney time on the Australian stock exchange. The stock, which has ten ‘buy’ ratings, four ‘hold’ ratings and two ‘sell’ ratings, has gained 36 percent compared with a 27 percent gain on the benchmark index.

China’s economy expanded 8.9 percent in the third quarter, the fastest pace in a year. Demand for minerals is on the verge of “unprecedented growth” as China and India drive consumption, BHP Chairman Don Argus said Oct. 22.

BHP last month reported record first-quarter production of iron ore as steel companies resume output at mills in China, Europe and the U.S. on signs of recovery in the global economy. China accounted for $9.9 billion, or 20 percent, of BHP’s sales in the year ended June 30, according to the company.