MELBOURNE – Top global miner BHP Billiton said on Tuesday it will drive further cost cuts across its Australian business, and forecast strong price support from China for steelmaking raw materials.

BHP will target $1.6-billion in productivity gains at its Australia iron-ore, copper and coal units over the next two years, Minerals Australia president Mike Henry told a briefing in Adelaide.

"By sharing knowledge and replicating best practice across our global portfolio, we've been able to substantially reduce unit costs at our Australian mining operations over the last five years. But we have further to go," he said.

In a bullish outlook, the company said prices for iron ore and metallurgical coal could rebound sharply before February as buyers look to replenish stocks.

"While steel production in China will fall in the short term due to the mandated winter cuts and this could impact short term demand for iron ore and met coal ... record margins means competition for premium quality raw materials is high," Vice President of Marketing Vicky Binns told the investor call.

"There remains a risk that before February next year we could see a sharp recovery in steel prices and raw materials prices as well."

Binns said Beijing's focus on compliance with environmental regulations means that structural reform would continue to support premiums for high quality raw materials.

China's belt and road initiative will drive an extra 150 million tonnes of steel demand, driven by $1.3-trillion of infrastructure development, she said.

In copper, the short-term outlook was supported by a shortage of concentrates, Binns said, after several disruptions at mines and the potential for work stoppages over wage agreements in Chile and Peru into 2018, as well as changes to China's scrap import regulations.

BHP forecast an additional 700 000 t of copper in concentrate would be produced between now and 2020, while China would add 1.5-million tonnes of copper capacity by 2020, alongside capacity expansion in India.

"There just doesn't seem like enough copper concentrate to go around," she said.

China's blanket import ban on a type of assembled copper scrap from the end of 2018 could also lead to a "leakage" of around 100,000 tonnes of copper in 2018 and more than double that in 2019.

"China will be faced with a shortage for copper concentrates and a shortage of imported scrap, so it will need to provide for its growth in demand by importing more blister, anode and cathode and that is good for cathode premiums and for the copper price overall." Further out, demand from electric vehicles and renewables was set to drive copper consumption, she said.