Bali blasts may hurt global economy

Bali blasts may hurt global economy

MELBOURNE, AUSTRALIA: Australia-based resources conglomerate BHP Billiton (BHP) warned Tuesday that terrorist bomb blasts over the weekend in Bali, Indonesia, could threaten the prospects for a recovery in the global economy.

Briefing analysts in Sydney, BHP Billiton's head of base metals, Brad Mills, said that while low metal stocks mean prices are set to rally sharply once industrial production recovers, the "negative scenario" is that the latest terrorist attacks could prove another external shock to the world economy.

"The negative scenario is that...the very tragic events over the weekend are another external shock to the entire world economy that sinks to a lower level that takes us to a place we've never been before, and we then have to work our way through that," Mills said.

On the plus side, he said the low level of consumer stocks means the base metal market is primed for a rally.

"Industrial production is the key driver for us in the base metal business, and if we see industrial production pick up you will see a very rapid change in the price of base metals," he said. -- Dow Jones