Australia cuts commodity export outlook despite gold price gain
Australia cut its forecast earnings from commodity exports, as a meteoric rise in gold prices fails to offset weakness in iron-ore and natural gas.
Total resource and energy export earnings fell about 7% to an estimated A$385-billion in the 12 months through June, the Department of Industry, Science and Resources said in a quarterly report released Monday. Income is set to fall further in the next two years because of rising trade barriers, weaker global economic growth and declining prices, it said.
Iron ore continues to be Australia’s biggest income earner, at about 30% of the total. While shipments will rise, declining grades and falling prices mean earnings for the commodity will slip below A$100-billion in 2026-2027 for the first time this decade.
Liquefied natural gas exports are also set to fall, as new supply from the US and Qatar is set to see prices for Australia’s second-biggest commodity drop to about $10 a million British thermal units in 2027 from around $15 early this year. Earnings from thermal coal will also decline, while its steelmaking counterpart will hold steady.
The outlook is much more positive for gold, Australia’s third-biggest commodity, with earnings seen jumping 22% to $56-billion in the financial year that ends Monday. The department is also bullish on the outlook for copper, lithium and uranium.
“Higher prices for gold, and forecast higher copper and lithium exports, are partly offsetting the impact of lower prices for iron ore, coal and LNG,” Resources Minister Madeleine King said. “While global commodity prices are easing, the report suggests Australian resources companies will continue to remain competitive on the global stage.”
Finally, prices for lithium are set to “remain subdued” but Australia will remain the leading supplier of the battery metal to 2027, according to the report.
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