Australia has raised its forecast for resource export income this financial year. However, the long-term outlook remains bleak as global demand weakens and prices fall.
Stronger Short-Term Earnings, But Decline Ahead
The Department of Industry, Science and Resources expects resource exports to reach A$387 billion ($243 billion) by June 2025. This is a 4% increase from its last forecast. However, earnings will still be 7% lower than last year.
Looking ahead, the department predicts export income will drop further, reaching A$343 billion by June 2030. A weaker Australian dollar and higher iron ore and LNG prices have driven this year’s increase. But long-term declines in demand will limit future earnings.
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Trade Tensions Fuel Uncertainty
The department warns that global trade wars could slow economic growth but also increase price volatility. Rising geopolitical risks may push more investors toward gold as a safe haven.
“With trade barriers still being negotiated, and the possibility of retaliatory measures, it will take time for the full impact on the world economy to become apparent,” the report stated.
Supply chain disruptions and changing trade patterns could create bigger challenges than slower economic growth.
Iron Ore, Coal, and LNG to Decline
Iron ore, coal, and LNG have powered Australia’s economy for years. But their earnings will drop by 40% by the end of the decade.
Thermal coal prices will fall from A$135 per ton in 2024 to A$98 per ton in 2030. Countries are shifting to renewable energy and increasing domestic coal production to cut imports.
New LNG supply from the US and Qatar will push prices from $15 per million British thermal units (Btu) this year to $9 per million Btu in 2030.
Copper Bucks the Trend
While most resources will decline, copper will rise 7% annually. The metal plays a key role in the global energy transition. Increased demand for electric vehicles, renewable energy, and infrastructure will drive its growth.
Gold Prices to Stay Strong
Gold will remain stable as geopolitical risks and economic uncertainty increase demand for safe-haven assets. The department expects export earnings from gold to hold steady.
Iron Ore Faces China Slowdown
Iron ore remains Australia’s biggest export, but prices will drop as global supply grows and China’s demand weakens.
Shipments from Port Hedland, Australia’s key iron ore hub, fell by 14.8% in February. This suggests China’s industrial activity is slowing.
Past Boom Fades as Market Normalises
Australia’s resources sector enjoyed record profits during 2021-22 and 2022-23. The COVID-19 pandemic, extreme weather, and the Russia-Ukraine war pushed prices to all-time highs.
Now, the market is returning to more sustainable levels. The government predicts a 6% drop in export earnings this year, from A$415 billion to A$387 billion.
This is less than the 10% drop forecasted in December, but the trend remains downward. Earnings will continue to decline over the next five years before stabilising near A$343 billion.
The Road Ahead
Australia’s economy remains heavily reliant on commodity exports. But global demand shifts, renewable energy growth, and trade tensions will shape the future.
With iron ore, coal, and LNG facing declines, Australia must adapt to new market realities. Copper’s rise offers some hope, but the days of record-breaking resource earnings appear to be over.
