According to the Department of Industry, Science, Energy and Resources’ (DISER) latest Resources and Energy Quarterly report, Australia’s resource and energy exports are forecast to hit a record $296 billion in 2020–21, a strong result, in the context of the COVID-19 pandemic.
The improved outlook reflects the ongoing rollout of vaccines, and the momentum this is providing for economic activity and trade amongst many of Australia’s major trading partners. Ongoing success in managing COVID-19 and reduced supply disruptions are expected to restore global demand for resources and energy commodities over the next five years.
As prices moderate, Australia’s resource and energy exports are forecast to ease slightly to $288 billion in 2021–22, and remain stable over the outlook period to 2025–26.
Australia’s iron ore export earnings are forecast to reach a record high of $136 billion in 2020–21, up from the December forecast of $123 billion. Strong demand for iron ore and disrupted supply from Brazil saw a surge in prices in late 2020 coupled with sustained growth in Australia’s export volumes.
Exports of new technology-related commodities are set to surge over the next five years, with lithium exports set to rise more than five-fold in real terms, nickel expected to almost double, and copper set to increase by a third over the outlook period.
Australia’s base metal exports are expected to grow over the short to medium term, as a rebound in global economic growth and industrial production increases the demand for Australian ferrous and non-ferrous metals.
The outlook for coal has improved since the December Resource and Energy Quarterly and export revenue and volumes have recovered.
Exports of metallurgical coal, used in steelmaking, are forecast to rise from a low of 173 million tonnes (Mt) in 2020-21 to reach 191 Mt by 2025-26.
Revenue is forecast to fall to $23 billion in 2020-21 from $35 billion in 2019-20 due to lower world prices, before recovering to $31 billion by 2025-26.
Thermal coal exports fell marginally from 213 Mt in 2019-20 to 206 Mt in 2020-21, but are projected to rebound to 231 Mt by 2025-26.
Australian liquified natural gas export earnings are forecast to fall from $48 billion in 2019-20 to $33 billion in 2020-21 due to weaker global prices and demand, before recovering to around $45 billion by 2025-26.
The latest Resources and Energy Quarterly is available on DISER’s website.
