BHP is expected to post a drop in overall production for the latest quarter

Image: Port Hedland Port Authority.

BHP, in its fourth quarter production report due tomorrow, is expected to record an overall fall in output.

Deutsche Bank forecasts a 0.9% drop in the June quarter compared to the previous three months. However, the full year will come in around 8% higher.

The key reasons are a drop in copper output due to lower grades at Escondida in Chile, the big mill at Olympic Dam being out of service, reduced coal volumes and lower US onshore output after the closure of oil shale rigs.

The world’s biggest miner in January shut down 40% of its onshore rigs in the US, in response to falling oil prices. Last month, it started the current financial year with just 10 rigs in operation from 26 last year.

On the upside, Deutsche Bank expects a strong performance from petroleum in Bass Strait and the Gulf of Mexico with a rise of about 3%.

Production and sales had been expected top be flat for the Pilbara with about 64.1 million tonnes. However, Port Hedland shipping data suggests this number could be closer to 66 million tonnes.

Deutsche Bank says it expects full 2015 financial year production guidance to be exceeded for thermal coal, iron ore and petroleum.

However, weak iron ore prices due to falling demand from China and a global oversupply will impact revenue raised.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at