(Australian Associated Press)
Australia’s resources and energy exports are forecast to reach a record $296 billion in 2020/21, despite the global economic downturn driven by COVID-19.
The latest Resources and Energy Quarterly report, produced by the federal Office of the Chief Economist, says the outlook for the sector has strengthened due to China’s quick rebound from the downturn and government stimulus.
Production constraints in many countries have seen prices gain momentum in early 2021.
Iron ore, LNG and base metals have reached multi-year highs, while there has been some restoration to coal prices.
As well, lithium exports – which were worth an estimated $1 billion in 2020/21 – are set to rise more than five-fold in real terms as interest booms in electric vehicles and electronics.
Nickel exports are expected to almost double, while copper exports are set to increase by almost one third over the same period.
Revenue from these three commodities combined are projected to reach $28 billion by 2025/26.
Moderating prices for the major commodities are expected to see earnings drop slightly, while Australia’s export volumes remain strong.
In real terms, export earnings are forecast to fall three per cent to $288 billion in 2021/22, before stabilising over the next four years.
Australia’s iron ore earnings are forecast to rise by over a third to $136 billion in 2020/21, before declining to $104 billion in real terms in 2025/26.
Metallurgical coal earnings are forecast to recover in line with higher prices, projected to reach $31 billion in 2025/26 while thermal coal export earnings are forecast to soften to $15 billion in 2020/21.
Gold export earnings are set to reach $29 billion 2020/21, before declining over the next four years.