Banking on recovery
JAPAN’S earthquake - induced recovery is likely to be a double-edged sword for Queensland, strengthening demand for metal and coal exports, but having the potential to damage other industries.
James Cook University associate professor of economics Natalie Stoekl said yesterday the rebuild following Japan’s earthquake and tsunami disaster would spur expanded demand for raw materials while fallout from its atomic energy woes could well see countries shelve atomic power plans, expanding demand for coal.
Her exports forecast was echoed by Peter Drysdale, emeritus economics professor at Australian National University, and Australian Bureau of Agricultural and Resource Economics and Sciences ( ABARES) chief commodity analyst Jamie Penm who forecast a rise in coking coal and iron ore exports to Japan.
They told Lloyd’s List DCN raw materials for reconstruction would spur the increase.
Japan accounted for 38 per cent of Australia’s energy exports, and 12 per cent of its mineral exports in 2009-10, Mr Penm said.
Iwaki, Townsville’s sister city, is one among many centres on Japan’s east coast to be rebuilt.
The city was devastated by the tsunami spawned by the magnitude nine, March 11 earthquake and lies about 30km from the Fukushima No 1 nuclear power plant, d a maged by explosions , where reactors are at risk of meltdown. The industrial city of 345,000 is home to Nissan and Mazda vehicle plants, as well as chemical, pharmaceutical and electronics factories, and paper milling.
Ms Stoekl said expanded demand for resources, while a boon for the mining indus- try, carried dangers for Aust ralia in the form of a stronger currency, which could hurt agriculture, education and tourism.
‘‘ A minerals boom can push up the value of the A-dollar, so while it is good for one sector it may be detrimental to others,’’ she said.
Ms Stoekl said the elephant in the room in wake of explosions at the Fukushima power plant was the energy plans of other nations.
‘‘ If there is a backlash against nuclear power, it will have a profound effect on the level of exports of coal from Queensland,’’ Ms Stoekl said.
‘‘ It happened in the 1960s in Australia and, given the present tight labour market, the more the mining sector booms, the more other sectors are likely to bleed.’’
Ms Stoekl said in terms of the speed of recovery in Japan, much would depend on how the Japanese responded to the disaster.
She said psychology could play a big role and it was a matter of how effectively and how quickly a population was able to move forward.
The Port of Townsville in the 2009-10 financial year shipped to Japan 200,000 tonnes of lead, zinc and copper concentrate and 500 tonnes of refined copper as part of 571,000 tonnes of total exports, with sugar constituting the bulk of the additional tonnage.
Exports to Japan from the port to date in the 2010-11 year total 153,899 tonnes, comprising mainly sugar.
WINNERS, LOSERS: Port’s mineral exports could increase while other industries may suffer