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The miner said that broad-based world growth, strong demand out of China and low inventory levels would sustain commodity prices at higher levels.
BHP Billiton chairman Don Argus today said the high prices would encourage producers to increase output, bringing the supply and demand fundamentals into balance over the medium term.
BHP Billiton would contribute to the new supply, by expanding its operations in a number of commodities, Mr Argus said in the group's annual report.
"BHP Billiton is well-placed to exercise the growth options within our portfolio and increase production capacity for many commodities currently in short supply," he said.
"Many of these expansions can be brought to market quickly and at low cost, a key competitive advantage that ensures we can be profitable."
Analysts expect strong demand to drive BHP Billiton's 2004/05 net profit to around $A5 billion ($US3.47 billion) up from $3.4 billion in 2003/04.
Mr Argus said while China's economy was expected to ease slightly from double digit growth rates, the country would remain a large and sustainable consumer of raw materials and resources in coming years.
While the rate of growth would vary, this should not alter the country's course of long-term growth and development, he said.
BHP Billiton's chief executive Chip Goodyear said rising raw material demand from the developing world would benefit the dual-listed miner in year's to come.
China's growth and effect on the global economy would face inevitable disruptions but would continue to impact on product demand, Mr Goodyear said.
"The impact of China's growth had shaped BHP Billiton's operating and development performance over the past year and we expect this to continue over the medium to long-term," he said.
Mr Goodyear's 2003/04 salary package totalled more than $US4.44 million ($A6.4 million) for the year compared to his 2002/03 remuneration of $US3.54 million (or $A5.24 million according to the exchange rate at the time).
The 2003/04 package included a fixed $US1.25 million base salary, $600,000 in retirement benefits and $US321,071 of other fixed benefits including medical and professional fees.
On top of this he received a performance based cash bonus of $US1.070 million and deferred shares valued at $US997,504.
The group's second highest paid executive was Group President of Energy, Philip Aitken who received a remuneration package of $US3.23 million up from the $US2.81 million previously.
This included a base salary of $US882,427, retirement benefits worth $US318,556 and a performance based cash and deferred shares bonus worth $US1.242 million.
The group's chief financial officer Chris Lynch received a total salary package of $US2.34 million including a fixed salary of $716,480, retirement benefits of $US248,619 and a performance based cash and deferred shares bonus worth $US1.19 million.
At 1125 AEST BHP Billiton shares were five cents lower at $13.16.
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