Australia’s resources and energy export earnings are forecast to fall over the next 2 years, reflecting declines in bulk commodity prices and a rise in the AUD/USD.
This latest REQ forecasts Australia’s resources and energy export earnings will decline to $372 billion in 2024–25 from $415 billion in 2023–24. Continuing falls in prices for bulk commodities such as iron ore, coal and LNG are expected to bring earnings down to around $354 billion in 2025–26.
The report reaffirms Australia’s place as a crucial global supplier of resource and energy commodities at a time of high geopolitical risk and renewed uncertainty across major economies. Commodity demand has been affected by tighter financial conditions in advanced economies and ongoing weakness in the Chinese property sector.
Commodity markets continue to adjust to the global energy transition, which is expected to support Australia’s resource export volumes over the outlook period to 2026.
Highlights from the September REQ include:
- Iron ore remains Australia’s top commodity export. The September 2024 REQ forecasts lower prices over the next two years, although volumes are forecast to increase by 1.7% a year. Exports are forecast to earn $107 billion in 2024–25 and $99 billion in 2025–26.
- Australia’s LNG export revenues are forecast to decline by $3 billion to $66 billion in 2024–25, and then fall to $60 billion in 2025–26. Modest declines in output at some ageing fields are expected to see export volumes decrease slightly from a peak in 2022–23.
- Gold exports are expected to earn $35 billion in 2024–25 and stay at this level in 2025–26. Gold prices have risen over 24% in 2024 on easing in monetary conditions, purchasing by emerging market central banks, geopolitical tensions, and worries over the Chinese property market.
- The sharp retracement in lithium prices has seen lithium exports fall from $20 billion in 2022–23 to an estimated $6 billion in 2024–25, before recovering to around $7 billion in 2025-26.
- Thermal coal exports are forecast to fall from $37 billion in 2023–24 to $32 billion in 2024–25 and $29 billion in 2025–26. Metallurgical coal exports are forecast to fall from $54 billion in 2023–24 and then to $42 billion in 2025–26.
Risks to the forecast include a broadening in the Hamas-Israel conflict, which could disrupt Middle East oil/LNG supply. Russia’s invasion of Ukraine also continues to put LNG markets at risk of further disruption. Higher-than-normal odds of a La Niña weather episode in 2024–25 raise the risk of wet weather and flooding which could impact production at Australian mines.
