Resources and energy quarterly: June 2023

Date published:
3 July 2023

Topics

Economics
Mining, oil and gas

Publisher

Office of the Chief Economist

The Resources and energy quarterly (REQ) contains the Office of the Chief Economist’s forecasts for the value, volume and price of Australia’s major resources and energy commodity exports.

The publication provides:

  • a 2-year outlook for global commodity prices, demand and supply
  • up-to-date global production and consumption data
  • forecasts for the production values, export values, volumes and prices of key Australian resources and energy commodities
  • reviews of relevant topics and issues
  • detailed statistical tables
  • interactive data using Power BI.

This edition also includes a special chapter on battery minerals to complement our analysis of Australia’s lithium sector.

Download the full report

Download data tables

Explore the interactive data dashboards

Use Power BI to build your own charts and tables.

Forecast data

Predicted commodity values and volumes

Historical data

Commodity value and volume data from past years

Principal markets

Historical commodity data filtered by market

Overview

Latest developments

Australia’s resource and energy export earnings are forecast to decline to $390 billion in 2023–24 from a record of $460 billion in 2022–23.

  • Resource and energy commodity prices continued to fall in the June quarter of 2023, as world economic growth slowed further under the impact of tighter monetary conditions policy in some major economies.
  • Lower energy prices will drive a sharp decline in resource and energy export earnings in 2023–24 to $390 billion, with another fall likely in 2024–25. Lower prices reflect weaker-than-expected world demand and improving world commodity supply. Supply is rising as a result of the end of La Nina climate conditions in the Southern Hemisphere, and as trade is reorganised as a result of sanctions imposed on Russia for its invasion of Ukraine.
  • The incentives for developing low emission technologies under the US Inflation Reduction Act have sparked an increase in global investment in the resource and energy sectors. Australia is well placed to benefit from the Act.

Australia's resource and energy exports by year

This chart shows Australia’s annual export values for major resource and energy commodities for the period 2007–08 to 2024–25.

This chart shows Australia’s annual resource and energy export values (in A$ billions) for each major resources and energy commodity from 2007–08 to 2024–25. 

The chart shows the 2 waves of resource and energy export earnings that Australia has experienced since the COVID-19 pandemic. The first wave occurred in 2021, as iron ore prices pushed to record highs following China's reopening. The second wave of revenues came from the spectacular surge in energy prices in 2022, which originated from the fallout over Russia's invasion of Ukraine. Higher energy prices lead to record high earnings for coal and LNG.

Macroeconomic outlook

Latest developments

Tighter fiscal and monetary policy are weighing on global economic growth.

  • Global macroeconomic conditions improved by less than expected in early 2023, as tightening monetary policy – aimed at curbing still-high inflation – weakened global demand.
  • Tight fiscal and monetary conditions in most major economies are expected to slow global economic growth over the second half of 2023 and early 2024.
  • The outlook for Australia’s major trading partners remains weak, with the RBA forecasting their GDP growth in 2023 to be around 3.75%, well below the pre-pandemic decade average.

Contribution of major economies to global GDP

This chart shows the annual share of global GDP for major economies, as well as the annual change and Australia's share of two-way trade. China is the largest national economy in purchasing power parity terms and holds a 30% share of Australia's two-way trade. Data table follows
Country Share of global GDP Yearly change Share of trade with Australia
China 19% +3.0% 30%
US 16% +2.0% 6%
EU 15% +3.2% 9%
India 7% +6.8% 4%
ASEAN 6% +5.3% 10%
Japan 4% +1.4% 12%
South Korea 2% +2.6% 7%
Taiwan 1% +3.3% 4%
Australia 1% +3.6% Not applicable

Steel

Latest developments

Steel output facing subdued demand in 2023 as global economy slows.

  • World steel production is facing subdued demand as global economic growth slows. Weak demand from the manufacturing and construction sectors in advanced nations is flowing through to major steel makers.
  • An expected stabilisation and modest recovery of the Chinese property sector over the coming year should help support global steel demand.
  • Infrastructure and non-residential construction activity are expected to support world steel demand over the outlook period. Growth in steel production is expected to be strongest in India, South-East Asia and the Middle East.

Australian steel refineries

Map showing Australia's 4 steel mills. They are in Port Kembla, New South Wales; Sydney, New South Wales; Whyalla, South Australia and Melbourne, Victoria.

Iron ore

Latest developments

Iron ore prices expected to moderate as China’s recovery slows.

  • Spot iron ore prices have moderated in the June quarter, driven by the slowdown in global economic growth and an easing in the rate of recovery of Chinese steel production.
  • Australian export volumes have been rising steadily in recent years, with further greenfield supply from established and emerging producers expected to come online in the next few years.
  • Australia's iron ore export earnings are expected to decline from $123 billion in 2022–23 to $110 billion in 2023–24 and $93 billion in 2024–25. These declines are driven by lower prices over the outlook period.

Major iron ore deposits

Map of Australia showing that most iron ore deposits and operating mines are located in Western Australia

Metallurgical coal

Latest developments

Metallurgical coal export earnings are expected to remain solid in line with global steelmaking.

  • Metallurgical coal prices remain volatile but are holding well above their pre-2019 level. The Australian premium hard coking coal price is estimated to average US$273 a tonne in 2023 but is forecast to fall to around US$200 a tonne by 2025 as supply conditions improve.
  • Australia’s exports are forecast to lift from an estimated 163 Mt in 2022–23 to 175 Mt in 2024–25 as several new mines open.
  • As prices fall, the value of Australia’s metallurgical coal exports is forecast to fall from an estimated $60 billion in 2022–23 to $42 billion in 2024–25.

Major coal deposits

Map of major Australian coal deposits and mines. Most coal deposits are in Queensland and most operating mines are in New South Wales.

Gas

 

Latest developments

Australia’s LNG export earnings forecast to ease as prices moderate.

  • LNG prices have stabilised at US$10 per million metric British thermal units (MMBtu) over the June quarter after warmer-than-normal temperatures during the Northern Hemisphere winter limited the drawdown of European storage inventories (now safely around 70%).
  • European competition for uncontracted LNG cargoes will likely ease over the September quarter as storage fills completely, placing further downward pressure on prices in Asian markets.
  • While volatility in LNG markets could re-emerge over the Northern Hemisphere winter and boost spot sale earnings, the central scenario is that lower oil and gas prices will cause the value of Australian LNG exports to fall to A$60 billion by 2024–25, with volumes also easing to 79 Mt over the same period.    

LNG projects and gas basins

Map of Australia showing that LNG projects are located in Queensland, the Northern Territory and Western Australia. Their combined nameplate capacity is 88 million tonnes per year

Thermal coal

Latest developments

Australia’s thermal coal export earnings have begun to decline as the global energy transition continues.

  • Thermal coal prices weakened in May, but remain high relative to history. The Newcastle benchmark price (6,000 kcal) is forecast to fall from almost US$360 a tonne over 2022 to around US$120 a tonne by 2025.
  • A gradual recovery from recent supply outages is expected to see Australian thermal coal exports rise from 178 Mt in 2022–23 to 202 Mt in 2024–25.
  • As prices decline, export values are forecast to fall from a peak above $60 billion in 2022–23 to around $30 billion by 2024–25.

Major coal deposits

Map of major Australian coal deposits and mines. Most coal deposits are in Queensland and most operating mines are in New South Wales.

Oil

Latest developments

Australia’s crude oil and condensate export earnings forecast to fall over weakening global demand outlook

  • The Brent crude oil price is expected to rise in the second half of the year to average US$84 a barrel over 2023, as a rebound in global transport demand drives higher oil usage. However, the price is expected to fall to around US$78 a barrel by 2025 as modest market surpluses emerge.
  • Australia’s crude and condensate production volumes are expected to fall to around 290 kilobarrels per day by 2024–25 as production at the North-West Shelf declines.
  • Australia’s crude and condensate export earnings are expected to lift to A$13.7 billion in 2023–24 as export volumes rise, before falling to A$11.7 billion in 2024–25 as output declines at the North-West Shelf.

Crude oil, condensate and LPG resources

Map of Australia showing that around three-quarters of Australia's oil production comes from the Carnarvon Basin offshore Western Australia

Lithium

Latest developments

Lithium export earnings to decrease from record highs as falling prices outweigh rising volumes.

  • The value of Australian lithium exports is set to decline from its 2022–23 record, with lower prices offsetting the impact of higher export volumes. Prices are falling as the global supply of lithium catches up to global demand.
  • Earnings are forecast to be A$19.5 billion in 2022–23, declining to A$17.8 billion in 2023–24 and A$14.9 billion in 2024–25.
  • Project expansions and new mines will increase Australian lithium production, with a growing share of mine output refined domestically to produce lithium hydroxide. Sources of global lithium supply continue to diversify amid international efforts to strengthen critical minerals security. This provides further opportunities for investment in Australian lithium assets.

Major lithium deposits and mines

Map of Australia showing that all producing lithium mines and almost all deposits are located in Western Australia

Uranium

Latest developments

Uranium export earnings should rise as prices pick up and a new mine opens in South Australia.

  • Uranium prices are forecast to lift from US$50 a pound in 2022 to around US$62 a pound by 2025. Price growth reflects sustained low investment and potential structural shortfalls in uranium supply.
  • Australian exports are forecast to increase from around 5,560 tonnes in 2022–23 to around 6,000 tonnes by 2024–25 (see Australia section). Growth reflects the expected opening and ramp-up of Boss Energy’s Honeymoon Mine in South Australia.
  • Price and volume growth are expected to drive uranium export values from around $780 million in 2022–23 to $900 million by 2024–25.

Major uranium deposits

Map of Australia showing uranium deposits and operating mines

Gold

Latest developments

Australian gold export earnings to decline as prices ease from near-record highs.

  • Gold prices are estimated to have averaged US$1,920 an ounce in the first half of 2023, with support coming from strong safe-haven buying and a slightly weaker US dollar. Prices are forecast to remain elevated but decline gradually to average around US$1,770 an ounce in 2025.
  • Australian gold production decreased to 71 tonnes in the March quarter of 2023 due to disruption from heavy rainfall. Production is forecast to increase with new projects and expansions.
  • Gold earnings are forecast to decrease from $23 billion in 2022–23 to around $21 billion in 2024–25 as lower prices outweigh higher volumes.

Major gold deposits

Map of Australia showing that most major gold deposits are in Western Australia

Aluminium, alumina and bauxite

Latest developments

Primary aluminium prices to fall in 2023 due to sluggish global demand.

  • Global demand for primary aluminium is sluggish, particularly in Europe. Tighter monetary conditions are likely to impact Western nations’ aluminium demand in 2023–24.
  • Production outages in China’s Yunnan Province have reduced supply. Declining energy prices are restoring the profitability of aluminium production.
  • Earnings for Australian exports of aluminium, alumina and bauxite are expected to increase from $16 billion in 2022–23 to $17 billion in 2024–25 as prices rise.

Major bauxite deposits

Map of Australia showing the locations of bauxite deposits and mines

Copper

Latest developments

Demand in global energy transition to support Australia’s copper exports.

  • A slower-than-expected rebound in Chinese economic growth, combined with weak construction activity in Western countries, is putting downward pressure on copper prices.
  • Growing demand from the power and EV sectors are key drivers of copper consumption over the outlook period. Indian consumption should be especially strong.
  • Australian export earnings of copper are estimated to have declined slightly in 2022–23. Higher Australian production and exports will support export earnings, which are set to grow to $13 billion in 2024–25.

Major copper deposits

Map of Australia showing copper deposits are located in all states

Nickel

Latest developments

Continued expansion of Indonesian nickel causing high prices to ease.

  • A slow recovery in Chinese goods demand in the first half of 2023 has dampened global nickel demand. However, a strong second half, combined with EV demand in Western markets, is expected to see nickel usage grow by 9.3% in 2023.
  • Nickel supply is expected to exceed this strong nickel demand, driven by Indonesian (and some Chinese) output growth. Surpluses are evident in Chinese markets, though Western markets remain tight.
  • Australian nickel export earnings are expected to ease slightly as prices come off record highs. Exports are forecast to fall from $4.5 billion in 2022–23 to $4.2 billion in 2024–25.

Major nickel deposits

Map of Australia showing most nickel deposits and all operating mines are located in Western Australa

Zinc

Latest developments

Australia’s zinc export earnings forecast to fall due to weakening global demand.

  • The zinc price has declined noticeably in the June quarter due to worries of a global economic slowdown. But supply remains a concern, and the zinc price is expected to rise gradually over the outlook period, averaging US$2,900 in 2025.
  • Australia’s zinc production is forecast to rise strongly over the outlook period, driven by expansion of the Century Mine and a recovery in production at existing mines impacted by bad weather and COVID disruptions.
  • Australia’s zinc export earnings are forecast to remain steady at $4.3 billion between 2022–23 and 2024–25, with a forecast price decline balanced by higher production.

Major zinc deposits

Map of Australia showing zinc deposits in all states. The largest operating mines are in Queensland and the Northern Territory

More information

Find more editions of the REQ
Read about major resources and energy projects in Australia
Tell us what you think of this publication