UPDATE 3-BHP Billiton books record loss, says commodity price 'free fall' over
* Writedowns, charges push BHP Billiton net loss to $6.4 bln
* $1.2 bln underlying profit weakest since merger in 2001
* BHP sees rising cash flows, confident in long-term outlook (Adds CEO comment, analysis, detail)
By Sonali Paul and Barbara Lewis
MELBOURNE/LONDON, Aug 16 (Reuters) - The world's biggest miner BHP Billiton on Tuesday said deep cost cuts and a steady elimination of oversupply will bolster its business following a record loss caused by a bad bet on shale and a dam disaster in Brazil.
The firm's share price was trading about 1 percent higher by 1530 GMT, building on a rally of nearly 14 percent since the start of the year, driven by a recovery in commodity prices.
Many investors are wary of the commodity price rally, saying it has been fueled by Chinese financial stimulus rather than a real recovery in demand or any output curbs from the big producers.
BHP Chief Executive Officer Andrew Mackenzie, however, told reporters he saw signs of a fundamental change and there was no longer a sense that commodity prices were "in free fall".
"Steadily, the end of the supply creation on the back of the China boom is coming to an end, product by product, and that's putting more of a floor under price than perhaps perceptibly existed maybe a year ago," he told a news conference in London. Continuación...