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SYDNEY: Australia‘s resources and energy export earnings over the next two years are expected to take a hit due to softening global demand, particularly in its largest trading partner China, official forecasts showed on Tuesday.
Commodity export earnings are forecast to fall to A$400 billion ($258.3 billion) in 2023/24 from last year’s record A$467 billion ($301.5 billion), and to A$352 billion by 2024/25, the Department of Industry, Science and Resources said in a quarterly report.
“The world economic slowdown, including the sluggish rebound in the Chinese economy from Covid-19 lockdowns, will cut resource and energy export earnings … a further fall seems likely in 2024-25,” the report said.
Improved supply conditions for some commodities will see prices retreat further from the peaks hit in 2022.
Resources minister Madeleine King said the lower export earnings reflected a return to more normal prices.
“While overall export revenue is easing from record highs, Australia’s resources and energy exports remain strong and continue to underpin Australia’s economic wellbeing,” King said in a statement.
Slower growth in the Chinese residential property sector will lower demand for steel, with flow-on effects for iron ore, Australia’s most valuable commodity export.
Driven by lower prices, earnings from iron ore exports will likely slide to A$120 billion in 2023/24 from A$124 billion last year. Earnings are seen at A$99 billion in 2024/25.
Thermal coal earnings will remain on a downward trajectory this financial year as prices continue to ease off their 2022 peak. Earnings from metallurgical coal, used for making steel, are expected to fall to A$47 billion this year from last year’s A$62 billion.
Liquefied natural gas earnings are forecast to drop to A$71 billion this year versus the record A$93 billion hit in 2022-23, as the spike in global energy prices set off by the war in Ukraine unwinds.
Demand for aluminium, lithium and nickel remain high as the global electric vehicle market continues to grow.
Commodity export earnings are forecast to fall to A$400 billion ($258.3 billion) in 2023/24 from last year’s record A$467 billion ($301.5 billion), and to A$352 billion by 2024/25, the Department of Industry, Science and Resources said in a quarterly report.
“The world economic slowdown, including the sluggish rebound in the Chinese economy from Covid-19 lockdowns, will cut resource and energy export earnings … a further fall seems likely in 2024-25,” the report said.
Improved supply conditions for some commodities will see prices retreat further from the peaks hit in 2022.
Resources minister Madeleine King said the lower export earnings reflected a return to more normal prices.
“While overall export revenue is easing from record highs, Australia’s resources and energy exports remain strong and continue to underpin Australia’s economic wellbeing,” King said in a statement.
Slower growth in the Chinese residential property sector will lower demand for steel, with flow-on effects for iron ore, Australia’s most valuable commodity export.
Driven by lower prices, earnings from iron ore exports will likely slide to A$120 billion in 2023/24 from A$124 billion last year. Earnings are seen at A$99 billion in 2024/25.
Thermal coal earnings will remain on a downward trajectory this financial year as prices continue to ease off their 2022 peak. Earnings from metallurgical coal, used for making steel, are expected to fall to A$47 billion this year from last year’s A$62 billion.
Liquefied natural gas earnings are forecast to drop to A$71 billion this year versus the record A$93 billion hit in 2022-23, as the spike in global energy prices set off by the war in Ukraine unwinds.
Demand for aluminium, lithium and nickel remain high as the global electric vehicle market continues to grow.
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