Australia’s resources and energy export earnings are expected to reach A$252 billion for the financial year 2018-19, before declining to A$238 billion in 2019-20, based on preliminary estimates, according to a report by the Australian government's Department of Industry and Science. While the prices of Australia’s major resource commodities have generally been rising, they are expected to decline in 2019-20 because of moderating demand and rising supply.
The value of Australia’s iron ore exports is forecast to decline from A$61 billion in 2017-18 to A$56 billion in 2019-20, with lower prices more than offsetting growth in export volumes. Australia’s iron ore export volumes are forecast to increase from 849 million mt in 2017-18, to 878 million mt in 2019-20, driven by a ramp-up in production from Australia’s largest producers. Meanwhile, the iron ore price is forecast to decline to US$51/mt FOB Australia in 2020, as a result of a forecast decline in steel production in China and a well-supplied seaborne market.
According to the September quarterly report, Australia’s coking coal export volumes are forecast to grow from 179 million mt in 2017-18 to 198 million mt in 2019-20, reflecting an expected recovery from supply disruptions and modest production growth, while export earnings reached a record A$38 billion in 2017-18, driven by strong prices, and are forecast to fall to A$31 billion in 2019-20, as rising export volumes are partly offset by lower prices. The premium hard coking coal spot price is forecast to decline from an average of US$197/mt in 2018 to US$145/mt in 2020. The impacts of improved supply and weakening demand from China are expected to outweigh the impact of growing demand in India.