SYDNEY, Sept 25 (Reuters) - BHP Billiton , the world's biggest mining company, on Wednesday said global commodities markets were being undermined by rising supplies of raw materials and warned the outlook for steel demand in Asia was expected to moderate.
"We maintain a positive outlook over the long term as the fundamentals of wealth creation, demographics and urbanisation continue to create demand for commodities across Asia and other markets," BHP Chairman Jac Nasser said in the company's fiscal 2013 annual report.
"Increased supply has, however, exerted downward pressure on many commodity markets more recently and we expect this trend to continue over the short term," Nasser said.
In the previous decade, BHP like most miners, splurged on expansion projects in iron ore, coal, copper and other minerals in order to capture ever-rising raw material demand from China.
Many of these projects, such as massive expansion in Australian iron ore mining, are now meeting more tempered demand from China.
BHP said growth rates for steel demand in Asia were expected to moderate, as the Chinese economy gradually rebalanced.
Citi said in a note it sees iron ore prices slipping to $115 a tonne from around $132 now due to weaker-than-expected Chinese steel demand and more iron ore supply coming through.
Combined iron ore output from Australia's top three miners - BHP Billiton, Rio Tinto and Fortescue Metals Group - is forecast to increase by a record 34 million tonnes in the fourth quarter from a year earlier, and by 12 million tonnes from July-September, according to the investment bank.
Nasser described fiscal 2013 as a "volatile and uncertain year for global economies."
BHP's net profit fell by 30 percent in fiscal 2013 to $10.9 billion, though it lifted its full-year dividend by 4 percent to $1.16 per share.
The lion's share of profits came from its iron ore, petroleum and copper divisions, though each posted lower returns versus the previous year.
BHP also said in the report it had reduced remuneration packages for its chief executive officer and group management members by around 25 percent from previous years, reflecting the leaner times ahead.
"While lower rates of investment across the industry will ultimately lead to more balanced markets, all resources companies will need to improve productivity and be flexible enough to adapt to change in this more challenging environment," Nasser said.