Sept. 25 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, said rising supply will continue to weigh on commodity prices in the short term.
Increased supply has “exerted downward pressure on many commodity markets more recently and we expect this trend to continue over the short term,” Jac Nasser, chairman of the Melbourne-based company, said today in its annual report.
Mining companies are cutting costs and shedding workers after a decade-long boom in prices, driven by the biggest importer China, has waned. BHP Chief Executive Officer Andrew Mackenzie cut capital spending this fiscal year as investors including BlackRock Inc. pressure mining companies to defer expansions and acquisitions.
“We maintain a positive outlook over the long-term as the fundamentals of wealth creation, demographics and urbanization continue to create demand for commodities across Asia and other markets,” Nasser said, according to the report.
BHP rose 0.4 percent to A$36.02 at 10:48 a.m. in Sydney trading. The shares have declined 3 percent since the start of the year.
Lower prices have weighed on income, with BHP’s profit, excluding one-time items, declining 6.9 percent to $6.8 billion in the six months to June, while the London Metal Exchange Index fell 11 percent.
--Editors: Jason Rogers, Iain Wilson