Reuters reported that BHP Billiton has painted a gloomy near term outlook for metals demand as it defended its decision to drop a USD 66 billion bid for rival Rio Tinto.

BHP, facing its shareholders for the first time since walking away from the Rio bid on said in its annual meeting that uncertainty in commodities markets would continue in the short term and it was ready to close loss making operations.

Mr Marius Kloppers CEO of BHP warned shareholders that Chinese steel production would decrease 17% YoY and that BHP would not be immune to global economic uncertainty.

Shareholders of BHP Billiton greeted the news positively pushing the stock beyond prior supply and in the process confirming a double bottom. This sets up a possible move to July 2008 and August 2008 reaction highs.