The June edition of Resources and Energy Quarterly, released by the Department of Industry, Innovation and Science, has indicated record earnings for energy exports.
The report shows that Australia’s resource and energy export earnings are estimated to have reached a record $226 billion in 2017–18, driven by rising LNG exports.
Export values are being supported by strong prices for several key commodities. Thermal coal prices rebounded in the June quarter, while iron ore prices held up strongly as Chinese steel production rose.
LNG prices are strong and expected to grow further, as demand rises for flexible dispatchable energy. Prices for base metals are strengthening, with demand for copper and nickel particularly strong.
Commodity prices have followed a clear trend over the past 10 years, rising largely in unison during the early days of the commodity boom, and then easing back as new investment and supply followed.
Commodity prices now are following a less unified trend, however, with growth in some offsetting falling prices in others. Trends in global industrial production will continue to play a significant role in commodity demand moving forward.
The report indicates that growth in global industrial production and manufacturing output appears to have peaked in the first half of 2018, suggesting that resource commodity prices may generally have set their highs for the cycle.
View the full report here.