The world's largest mining company recorded a "solid performance" in the first quarter of its financial year, delivering production rises in the key commodities of iron ore and petroleum, despite a challenging supply environment.
"Macroeconomic indicators show that Chinese growth has softened during the quarter, albeit from very high levels", BHP Billiton on Wednesday said in statement.
"We expect volatility and uncertainty to continue in the short term."
Rival Rio Tinto Ltd has said demand for steel-making raw materials, copper and aluminium has slowed and warned any bounce in Chinese demand will be delayed until next year.
However, BHP Billiton on Wednesday said it was "confident" the industrialisation and urbanisation of China and other developing nations would drive "strong longer term demand" for its products.
Fat Prophets analyst Gavin Wendt said he thought BHP Billiton's comments reflected those of Rio Tinto chief executive Tom Albanese last week, when he said "that China is easing off".
"There is an easing off in economic growth but China is not going to fall off the edge of the earth - we are seeing a slowdown and that's probably been exacerbated by the post-Olympics slump," Wendt said.
Shares in BHP Billiton, which is pursuing Rio Tinto with a $US76 billion ($A107.85 billion) takeover offer, shed $2.06, or 7.03 per cent to close at $27.25 on Wednesday.
But Rio Tinto gained $4.04, or 5.43 per cent, to $78.40 amid speculation amongst traders that BHP Billiton's bid would succeed and the presence of a large buyer, rumoured to be Chinese, of its shares in the market.
"I think people have caught on that it is trading at too much of a discount to BHP's bid, and although the European approval [of the bid] is still some time away I think we've cleared the major hurdle with Australian regulatory approval," MF Global senior trader Anthony Anderson said.
BHP Billiton shares have dropped 45 per cent, and Rio Tinto has lost 49.8 per cent, since both companies hit 12-month closing high's on May 19 of $49.55 and $156.10, respectively.
Resource stocks have plunged on the Australian share market this year amid expectations the financial market turmoil will spark a global recession and reduce demand for commodities.
BHP Billiton's iron ore output rose 15 per cent to 29.82 million tonnes in the three months to September 30, against the previous corresponding quarter, after it expanded projects in Western Australia.
Petroleum output increased 15 per cent to 34.8 million barrels of oil equivalent (mmboe) helped by newly commissioned projects, despite the impact of two hurricanes in the Gulf of Mexico.
"The report was solid, I think the encouraging thing was the strong production growth from their two key commodities of iron ore and petroleum," Wendt said.
Copper output was flat at 308,900 tonnes, with lower production at the Escondida mine in Chile offsetting an improved performance at Olympic Dam in South Australia.
BHP Billiton says copper output at Escondida is estimated to be about ten per cent lower in fiscal 2009.
Nickel output dropped 31 per cent to 26,800 tonnes, following a major furnace rebuild at the Kalgoorlie Nickel Smelter in WA and maintenance at the Yabulu refinery in Queensland.
Production of metallurgical coal, used in steelmaking, dropped by four per cent to 9.21 million tonnes as the company recovers from flooding at the start of the year.
Aluminium output declined eight per cent during the first quarter to 309,000 tonnes due to continuing power supply issues in South Africa, which has resulted in the partial shutdown of the Bayside smelter.
The company spent $US166 million ($A235.56 million) on mineral exploration during the first quarter and $US148 million ($A210.02 million) on petroleum exploration.
