Mining exports climbing

Rising prices, weaker dollar drive record forecast

THE Federal Government expects the nation’s resource and energy exports to hit a record $252 billion in 2018-19, buoyed by climbing prices for commodities such as natural gas and by a weaker Australian dollar.

However, the Department of Industry also said in a report that the value of such exports would edge back to about $238 billion in 2019-20 even as volumes rise again, pulled down as growing global supply and concerns over demand pressure prices. The figure for 2017-18 was $227 billion.

“While global economic growth, industry production and manufacturing output have continued to grow strongly so far in 2018, there are some concerning signs for resource and energy commodity producers, particularly with rising global trade tensions,” the department said in the report, released yesterday.

China and the US have been bogged down in a tit-fortat trade dispute that has hit global markets and stoked worries over the outlook for the global economy. China buys just more than half of Australia’s commodity exports, followed by Japan, then South Korea. Australia expects prices for steelmaking material iron ore to fall to about $US52 a tonne on a free on board basis in the 2019 calendar year and $US51 a tonne in 2020, as China’s steel production moderates, down from $US59.40 this year.

Still, Australia’s iron ore exports are expected to increase to 878 million tonnes in 2019-20 from 869 million tonnes this financial year and 849 million tonnes in 2017-18, driven by a ramp-up in production from the country’s largest producers.

But the overall value of iron ore exports is expected to drop to $56 billion in 2019-20 from $61 billion in 2017-18.

The Government said prices for metallurgical coal would average $US159 a tonne in the 2019 calendar year, trimming a forecast drop to $US156.80 that it made in June. That would also be down from the $US201 a tonne it sees for 2018. It also said that prices for the commodity would average $US145 a tonne in 2020, less than an earlier forecast of $US147.90.

For the first time, the department offered an outlook for lithium, used to make batteries for electric cars.

Australia accounts for 17 per cent of the world’s lithium production. Australia’s exports of spodumene, the raw material for lithium, are expected to rise to about $1.1 billion by 2020, from $780 million in 2017 and $117 million in 2012.

Five large plants are planned or under construction in Western Australia.