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Australian resources exports continue to grow

Australia’s resource export earnings are continuing to grow, with surging commodity earnings expected to offset global market volatility in the midterm.

The latest Resources and Energy Quarterly from the office of the Chief Economist projects resource exports will rise to a record $282 billion in 2019-2020, backed by an increase in gold export earnings and depreciation of the Australian dollar.

This is expected to counter the impact of escalating US-China trade tensions, with gold earnings set to surge by one third to $25 billion in the next year as investors flock to the safe haven commodity.

Despite major resource commodities such as iron ore and nickel reaching five-year highs this year, the report anticipates they will likely drift down over the midterm as a result of softer demand and rising supply.

Australia’s iron ore export earnings, for example, are expected to reach $81 billion in 2019-2020, up from $77 billion the year prior, off the back of high iron ore prices.

Earnings are projected to ease, however, to $65 billion in the final year of the outlook (2020-2021) as seaborne prices gradually decline and supply disruptions stemming from Brazil return to normal.

Similarly, zinc prices are expected to fall over the outlook period due to rising production and the value of lithium exports are also expected to drop, as lower prices offset higher export volumes.

The future for copper and nickel remains bright with export earnings for both commodities set to rise.

Growing production is set to coincide with increased consumption of copper leading to prices reaching a forecast $US6620 a tonne in 2021, up from $US6525 a tonne in 2018. Read more…

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