Australian resource earnings forecast to return to steady growth as commodity prices stabilise

The federal government is forecasting Australia’s resources and energy export earnings to settle back to normal over the next two years with commodity prices returning to long-term levels.

The Department of Industry, Science and Resources’ latest Resources and Energy Quarterly (REQ) suggests global commodity prices are settling down after the recent price spike linked to Russia’s invasion of Ukraine.

The June 2024 REQ estimates Australia’s export earnings will hit $417 billion in the 2024 financial year, down from the record $466b received in 2022–23, then ease further to $380b in 2024–25 and $356b in 2025–26 before finally levelling out.

Improved supply

Federal Minister for Resources and Northern Australia Madeleine King said global commodity supplies are steadily improving after Russia invaded Ukraine.

Australia’s export volumes across most major commodities remain strong, demonstrating that demand remains resilient for Australia’s resources.

Minister King said the forecasts showed gains in export volumes, underlining how the sector continued to underpin Australia’s economy and support more than a quarter of a million direct jobs, many in regional areas.

“This data shows the resources industry remains the bedrock of our economy and our economic wellbeing,” Minister King said.

“Our iron ore and LNG exports also continue to support the energy security of our major trading partners.”

Ms King said Australia has seen strong demand for the critical minerals and strategic materials needed for low-emission technologies—including lithium, nickel, copper and aluminium.

Nickel bounce

The June REQ forecasts a modest improvement in nickel prices after the world market was hit by a significant increase in supply from Indonesia, with global demand forecast to grow by 3.6 per cent over the coming two years.

However, Australian nickel export earnings are forecast to fall from $3.5b this year to $2.3b in 2024–25 and $1.5b in 2025–26.

Iron ore remains Australia’s top commodity export.

The REQ forecasts lower prices over the next two years, offsetting a 2.3% annual increase in volume.

Exports are forecast to earn $138b in 2023–24, $114b in 2024–25 and $102b in 2025–26.

LNG weakness

Australia’s LNG export revenues are forecast to decline from $69b in 2023–24 to $59b by 2025–26, due to lower world prices after the record highs of 2022.

Export volumes are expected to decrease slightly from a strong level in 2022–23.

Gold exports are expected to earn a record $33b in 2023–24, easing to around $31b in 2025–26.

Gold prices have risen in 2024 on the back of strong demand from investors and central banks, supported by the prospect of lower global interest rates, geopolitical tensions and worries over China’s property market.