In a new report, the Department of Industry, Science and Resources has forecast that the record high value of Australia’s resources and energy exports that was seen in 2022-23 will slowly drop to more normal levels as commodity prices stabilise.
In the September edition of its Resources and Energy Quarterly report, the department predicts an easing in resources and energy export values to $400 billion in 2023-24 and $352 billion in 2024-25 as world demand softens and global supply stabilises. This is down from a record $467 billion in 2022–23.
The outlook is broadly in line with projections in the March and June editions of the Resources and Energy Quarterly, with a lower Australian dollar driving the upward revisions.
Federal Minister for Resources and Northern Australia, Madeleine King, said the lower earnings reflected a return to more normal prices due to concerns about sluggish world growth and an easing in supply problems.
“Supply was constrained by the fallout from Russia’s invasion of Ukraine, flooding in Australia and Indonesia, and COVID-related workforce problems,” Ms King said.
“While overall export revenue is easing from record highs, Australia’s resources and energy exports remain strong and continue to underpin Australia’s economic well being.
“Australia remains a reliable and stable supplier of resources and energy to our export customers, and we are working to build investment, partnerships and supply chains for our critical minerals sector which will help the world meet commitments to lower emissions.”
The September 2023 Resources and Energy Quarterly features a special chapter on the global battery value chain which shows that Australia is a leading exporter of battery minerals such as lithium, cobalt, copper and nickel, with surging global demand for electric vehicles continuing to drive increased demand for battery metals.
“During my visit to Europe and the UK over the past week, I met with leaders in government and industry seeking access to Australian critical minerals and rare earth elements,” Ms King said.
“Demand for Australia minerals is growing as the world works to build the technology needed to decarbonise.
“The road to net zero is paved by Australia’s critical minerals.”
The September 2023 Resources and Energy Quarterly finds global prices for most major resources and energy commodities have fallen over the quarter.
Iron ore export earnings are expected to decline to $120 billion in 2023-24, down from $124 billion the previous financial year. Earnings are forecast to decline further to $99 billion in 2024-25 due to lower prices.
Australian lithium exports are forecast to decrease to $18 billion in 2023-24 and $16 billion in 2024-25, down from the record $20 billion in 2022-23. Additional refinery capacity will expand Australia’s ability to refine spodumene ore, allowing exports of the more valuable lithium hydroxide to grow over time.
Earnings from metallurgical coal, used for steel making, are expected to ease to $47 billion in 2023-24 and $41 billion in 2024-25, down from last year’s $62 billion. Thermal coal earnings are forecast at $36 billion in 2023-24 and $28 billion in 2024-25, down from $66 billion in 2022-23.
LNG earnings are forecast to ease to $71 billion in 2023-24 and $63 billion in 2024-25, down from $93 billion in 2022-23. The forecast reflects lower energy prices following the spike largely caused by Russia’s invasion of Ukraine.
The September 2023 Resources and Energy Quarterly is available on the Department of Industry, Science and Resources website.
