UBS forecasts mixed results for BHP Billiton September productions
Brokerage firm UBS advised its clients on Tuesday to expect declining coal and petroleum production for the September quarter from giant resource firm BHP Billiton Ltd but better iron ore and other mineral output for the company as its quarterly results were set to be made public on Wednesday.
UBS said that lower output was mainly due to the drilling moratorium imposed in the Gulf of Mexico following the BP oil spill in the Deepwater Horizon, which is now regarded as one of the worst environmental disasters that hit the United States.
According to the note sent out by UBS, BHP Billiton's total petroleum output from the three months leading to September would expectedly plunge by 7.5 percent as compared to the same period form last year.
Also, when pitted against the production numbers posted in the previous quarter this year, UBS is forecasting that BHP's overall petroleum output would retreat by 5.5 percent.
On the other hand, the company's coal production in the same quarter suffered considerable setbacks as the protracted rains seen from July to September in New South Wales and Queensland dampened BHP's production projections on both states.
The UBS note said that BHP Billiton's Queensland metallurgical coal output would dip by 6.4 percent in the September quarter while the Illawarra metallurgical coal output would slow down by 12.6 percent as against to the figures posted in the June quarter and would tumble by 9.3 percent when compared to the same quarter from the previous year.
UBS said that BHP Billiton normally expects solid numbers during the last half of the calendar year but the unfavourable weather conditions seen in 2010 proved otherwise for the company.
However, UBS has highlighted that 2010 would be another banner year for BHP Billiton's iron ore productions, specifically on its Rapid Growth Project 4 in the Pilbara region of Western Australia.
Ramp up production efforts being made by BHP on Rapid Growth should lead to iron ore output increase of 5.8 percent while the company's joint venture Samaco project in Brazil is forecasted to see a yield improvement of 3.9 percent.
UBS added that other production divisions by BHP would experience spikes on their outputs as the company's alumina and copper yields were projected to jump by 7.7 percent and 2.3 percent respectively.