Kloppers reassured investors at BHP’s annual meeting in Melbourne, Australia, that the environment was not as bad as during the financial crisis in 2008, but said the group was more cautious about the future.
Commodities groups have proven resilient over recent months as demand from Asian economies such as China and India for resources such as coal and metals has held up. With the deterioration in Europe, however, companies are concerned that the uncertainty will hurt demand.
“The heightened volatility and uncertain economic outlook are expected to continue to weigh on sentiment in the markets for our commodities,” Kloppers said.
He added that while Chinese steel mills had been rattled by Italy’s credit crisis, he remained confident that the Chinese government would continue to target eight per cent economic growth this year.
But he reiterated that customers had turned cautious in managing their stocks of raw materials and some had cut production. BHP’s shares closed down 2.8 per cent.