LNG helps to lift export earnings
Australia’s resource and energy export earnings are forecast to reach a record $230 billion in 2017-18, driven by higher iron ore and coal prices and rapidly growing LNG export volumes.
However, the Department of Industry, Innovation and Science expects export earnings to decline slightly from current levels, before levelling out at about $212 billion to $216 billion a year from 2019-20 onwards.
Department chief economist Mark Cully said this compared with average annual export earnings of $72 billion in the decade before the onset of the resources boom, validating the long-held view than the mining boom would continue to reap dividends long after the price peak in 2011.
Mr Cully said, in the Resources and Energy Quarterly report released last week, over the next few years, the prices of iron ore and metallurgical coal would be weighed down by increasing supply and declining steel production in China.
However, according to the report, the price of Australian LNG, set by the oil price, is expected to increase modestly, constrained by price-sensitive shale oil production in the US, and sluggish growth in world oil consumption.
The ramp up in export volumes, driven by the mining investment boom, is expected to have run its course by the turn of the decade.