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Mining titan BHP Billiton Ltd. (BHP) said Thursday demand for its products continues to grow but the global economic outlook is still fragile.

"It is still possible that the recovery could stall," Jac Nasser, BHP's chairman said at the company's annual general meeting.

Nasser said the European Union, U.S. and other developed countries still face ongoing challenges with regard to fiscal and financial stability.

But a structural shift in the global economy toward China and other emerging markets--including India, Russia, Brazil, and more recently Indonesia, Mexico and Turkey show promise for future growth as the forces of industrialization, urbanization and improved living standards continue to grip developing economies, he said.

BHP's chief executive Marius Kloppers said "despite our overall modest outlook for the world economy, we are encouraged by the incremental demand for our products driven by these emerging economies."

He said a pull back in investment by competitors during the global financial crisis created a supply lag which resulted in favorable supply-demand conditions.

Furthermore emerging economies are growing at about three times the rate of developed countries, he added.

BHP is operating most of its assets at full capacity and reported a 6% rise in iron ore output during the third quarter compared with the same period a year earlier. BHP's copper output rose 3% during the same period.

Nasser said commodities prices remain volatile due to concerns about the overall health of the global economy but he noted that BHP's diversified portfolio has reduced its exposure to price volatility.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com