The Anglo-Australian mining giant, BHP Billiton, has given its most optimistic assessment of the commodities markets since the global economic downturn. The company says surging demand from China for iron ore shipments will lift the mining industry, but it warns markets could remain volatile. From Sydney, Phil Mercer reports.
Industrial analysts say iron ore prices could rise 10 to 20 percent this year because of increasing demand as the global economy recovers.
BHP Billiton, the world's largest mining company, also is optimistic in its latest assessment of key commodity markets.
The company's output of iron ore, as well as copper, zinc and nickel, surged in the last three months of 2009 because of strong demand from Chinese carmakers and construction companies.
Iron ore production in the three months hit 32.45 million metric tons, up from 29.4 million tons a year earlier.
China's imports of iron ore in 2009 rose by more than 40 percent, a buying spree economists say was driven in part by efforts to stockpile supplies while global prices are low.
Australian commodities analyst Peter Rudd says BHP has set records for the production of key minerals.

"We've seen good levels of output, and given that, for the bulk commodities in particular - that's the iron ore and coal both steaming and coking - those prices are looking strong. Medium to longer term, it's an excellent outlook as far as profit from those particular commodities is concerned," he said.
BHP Billition said in a statement that government stimulus measures imposed over the past year "appear to have supported a gradual return to normalized global trade."
The Anglo-Australian miner, however, warns that markets could remain volatile as governments start to end their stimulus programs.
Indeed, news that China's government plans to rein in bank lending concerned investors Wednesday and Thursday, sending BHP's share price lower. Economists say much of China's growth in the past year was the result of stimulus efforts, including rapid lending growth that funded new housing and factory construction.

Last week Rio Tinto, the world's second-largest iron ore exporter, reported a 49 percent gain in fourth-quarter output.
Australia's mineral exports, especially to China and India, helped to insulate the country from the worst of the global slowdown.
Industry analysts say Australia's mining boom is likely to continue for years" because of strong demand from the developing economies in Asia.