Australia cuts commodity exports earnings forecast: reports
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The news: Australia's mining and energy export earnings are expected to continue to slide over the next two years due to elevated risks of trade barriers, falling bulk commodity prices and a weak global economy, according to a government report to be released on Monday.
The numbers: Total resource and energy export earnings fell about 7% to an estimated $385 billion in the 12 months through June, down from $415 billion in 2023-2024, the Department of Industry, Science and Resources said in a quarterly report seen by Bloomberg.
Iron ore remains the biggest income generator for the country at 30%, but while shipments will increase, the report says that declining grades and falling prices mean earnings for the commodity will slip below $100 billion in 2026-2027 for the first time this decade.
LNG exports are also forecast to fall as additional supply from Qatar and the US will prompt prices for the commodity to drop to around $10 a million British thermal units in 2027 from around $15 early this year.
The context: The June-quarter report released by the government department explained that uncertainty prompted by Trump’s policies has disrupted global trade and forced businesses to delay investment decisions, Reuters notes.
"The increased caution has induced further weakness in activity. The associated uncertainty is likely to impinge on world commodity demand, as the nations that Australia supplies are impacted," the report said. "The outlook is more uncertain than normal."
The report added that the outlook for Australia’s third-largest commodity, gold, is more positive, with earnings seen jumping 22% to $56 billion in the financial year ending Monday.
What they said: In the report seen by Bloomberg, Resources Minister Madeleine King said: “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. While global commodity prices are easing, the report suggests Australian resources companies will continue to remain competitive on the global stage.”
