Australia’s resource and energy export earnings to push a new record in 2021-22
- The outlook for Australia’s mineral exports continues to improve, as the world economy rebounds from the impact of the COVID-19 pandemic. Australian miners have found their product in high demand, helped by the impact of government and central bank measures.
- In 2020–21, export earnings are forecast to be a record $310 billion. Earnings will rise a further 8% to $334 billion in 2021–22, and then fall back to around $300 billion in 2022–23.
- Australia’s resource sector is set to capture the growth in demand for resources used in new and low emission technologies.
- 1.4 Prices Since the March 2021 Resources and Energy Quarterly, iron ore broke the US$200 a tonne mark and reached an all-time high. A recovery in demand in some of the advanced industrialised nations has added to strong Chinese demand, to keep prices high in a market still heavily constrained by low Brazilian supply (Figure 1.4). Prices are expected to ease by 2022, as Brazilian supply recovers and world demand moderates. Surging demand from steel producers has seen Australian metallurgical coal prices regain all of the losses incurred as a result of COVID-19 and China’s informal import restrictions. Australia’s dominant position in the seaborne market has meant that our exporters have been able to sell coal to replace the (mainly North American and Russian) cargoes bought by China that have typically been sold elsewhere. Prices are expected to be firm in 2021–22, as ex-Chinese usage recovers further. Thermal coal prices have risen, with premium Australian coal hitting its highest level in more than ten years. With economic activity rebounding, power utilities are scrambling to rebuild stocks before cooling demand peaks in summer. Prices are likely to ease back in the outlook period, as supply gains match rising demand (Figure 1.4).
