"In the short term, we believe underlying demand trends are still being masked by de-stock and stocking activities across the value chain," BHP Billiton said. "China inventory build is essentially complete, while we are now seeing evidence that restocking has commenced in North America, Europe and Japan. "However, commodity prices will be influenced by supply responses due to latent capacity currently existing in the industry. "BHP Billiton remains well positioned in a modest demand environment, with high margin businesses and a strong balance sheet that allows us to invest for the future and return funds to shareholders." BHP reported production was up six per cent for total petroleum products in the year, up four per cent in the June quarter on the prior corresponding quarter, and up 19 per cent on the March quarter.