"BHP Billiton on Wednesday predicted global steel demand would double over the next 15 years as the world’s biggest mining group said the advanced “upswing” already evident in China would be followed by a rebound in growth from developed nations in 2010.

Speaking ahead of an analysts presentation in Sydney, Tom Schutte, BHP president of marketing, said China’s recovery had been stronger than expected and there was little sign momentum had stalled.

China is BHP’s most important customer accounting for 20 per cent of its $50.2bn in sales in 2008-09. Iron ore, an ingredient for steel and coal, are among its biggest exports.

However, China’s relations with mining groups have been strained this year. The country failed to secure a price cut for the 2009-10 iron ore contract of 40-45 per cent. In addition, Rio Tinto abandoned a $19.5bn alliance with Chinalco, opting instead to form an iron ore joint venture with BHP to pool their Western Australia reserves. Months later, Stern Hu, Rio’s lead iron ore price negotiator in China, and three other Rio employees were detained in China on suspicion they stole commercial secrets.

Mr Schutte said BHP was still in talks with China on iron ore contract prices but sales to the country had been based on “provisional prices” that are similar to the 28-33 per cent cut in benchmark prices negotiated with other Asian customers.

In spite of those difficulties, BHP said monthly global steel production had recovered from about 70m-80m tonnes to 104m tonnes.

“China has increased ... from about 37 per cent of the world’s steel production to nearly 48 per cent if you annualise our current figures. That’s quite a big improvement,” Mr Schutte said.

BHP in July shook the conservative iron ore and steel industry by announcing that a third of its customers were moving to new price systems linked to the spot market, breaking with the 40-year trend of annual negotiated prices.

Mr Schutte said more parties from the iron ore and steel industry were taking part in the new price systems which had become “an increasing part of our [iron ore] book”.

“Many of our customers and also other players in the market are seeing the benefits of shorter term pricing,” he said, adding that China also had a “growing understanding” of the merits of the shorter term pricing mechanism.

Mr Schutte said although BHP was watching the Stern Hu affair with interest, it had not affected its operations in China.