Australia exports soar as commodities rise

• Australia’s resource exports are expected to hit unprecedented levels for a second consecutive year.
• The nation will export A$419 billion (S$399 billion) in metals and energy commodities.
• Price of thermal coal has skyrocketed to an all-time high amid a global energy shortage.

Australia resource exports are expected to hit unprecedented levels for a second consecutive year, as a global shortage drives up the price of its coal and natural gas.

As Russia’s invasion of Ukraine wreaks havoc on energy markets, unprecedented gains from liquefied natural gas and coal will more than offset declining earnings from top export iron ore, according to the Australian Department of Industry, Science, Energy, and Resources. The nation will export A$419 billion (S$399 billion) in metals and energy commodities in the 12 months ending on June 30, which is 3.5% more than the previous period and 13% more than anticipated in the last quarterly report.

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As global economic activity recovers from Covid-related slowdowns, the price of thermal coal has skyrocketed to an all-time high in a world devoid of freely available energy supply and experiencing increasingly disruptive weather. The loss of some Russian supplies from global markets has exacerbated the prognosis, according to the department, which predicts that prices will decline but remain, on average, at rather high levels.

Steady volume growth will also contribute to the increase in the headline figure, which, if realised, would record the second consecutive year of earnings over A$400 billion, according to the department.

Even though oil prices are reaching their highest level in a decade due to fears of impending shortages caused by EU sanctions against Russia, they are expected to decline as the global supply picture steadily outpaces the recovery of demand. According to the research, as nations scramble for alternatives to Russian gas, spot LNG prices will likely remain “extremely high for some time” amidst heightened global uncertainty.

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In addition to energy, iron ore earnings are anticipated to decline further, despite optimism regarding a rise in demand from China as Beijing redoubles its attempts to stimulate its economy and a predicted volume increase. As a result of reviving Brazilian supplies and rising output elsewhere, prices are anticipated to decline over the forecast period. The steelmaking material’s share of overall mineral exports will decline to slightly more than a quarter from nearly a third in the previous period.