Bulk commodities price surge leads to forecast record resources and energy commodities export earnings in 2016–17

Higher prices for steel-making raw materials and thermal coal, and increased LNG export volumes, are expected to see Australia’s resource and energy export earnings increase by 30 per cent in 2016–17, to a record $204 billion. Earnings should then steady at these levels in 2017–18.

The Resources and Energy Quarterly–December Quarter 2016, released today by the Department of Industry, Innovation and Science, shows the record earnings come through price spikes in bulk commodities, including metallurgical coal and iron ore. The publication also includes (in an appendix), the Resources and Energy Major Projects, 2016 Edition.

Prices have been boosted by continued growth in demand from China’s steel sector, as well as disruptions to the supply of a number of resource commodities. At the same time, significant investment in Australia’s productive capacity has supported strong growth in LNG export volumes.

Demand for raw materials like iron ore and metallurgical coal were driven up by a rebound in the Chinese construction sector. While the surge in bulk commodity prices has lasted longer than initially expected, given the temporary nature of many of these factors, the prices of metallurgical and thermal coal and iron ore are expected to decline in early to mid-2017.

Efficiency drives initiated by most producers (to counter the impact of the general downturn in commodity prices) mean Australia’s producers are well placed to meet demand for resources and energy over the next year.

Coal, iron ore, and LNG producers are forecast to deliver higher export volumes and earnings as the Australian mining boom continues its transition from the construction phase to the production phase.

For more information and to access the report, visit www.industry.gov.au/oce

Media contacts: Department of Industry, Innovation and Science media 02 6213 6308, media@industry.gov.au

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