Resources market tipped to fluctuate
Australia’s resources and energy export earnings are expected to drop to $186 billion in 2012-13, before growing in the medium term according to a new report released by the Bureau of Resources and Energy Economics (BREE).
BREE’s quarterly assessment of the export sector predicts falling international prices, coupled with the high Australian Dollar, to drive a three per cent decline in nominal export values of resources and energy products in comparison to last year.
“Iron ore prices, which have been particularly volatile over the last six months, are one of the main drivers of the lower export values. Iron ore export earnings are forecast to decrease 9 per cent to $57 billion, despite a forecast 11 per cent rise in volumes,” BREE’s Executive Director Professor Quentin Grafton said.
But its not all doom and gloom for the sector, with the report predicting a robust return to growth between 2013 and 2018, driven by increases in Australia’s mineral and energy commodity exports. Export volumes of iron ore, thermal coal and metallurgical coal are projected to rise at average annual rates of 10 per cent, 11 per cent and 7 per cent, respectively over that period.
Liquefied Natural Gas is set to be the stellar performer for the sector, with exports set to increase from 19 million tonnes in 2011-12 to 88 million tonnes in 2017-18 as the nation’s mega projects come online. “The nominal value of mineral exports is projected to increase by about 15 per cent from 2011-12 to 2017-18, but the real value of mineral exports in Australian dollars is expected to peak in 2014-15 at around $123 billion,” said Professor Grafton.
“The assumed continuation of a high-valued Australian dollar and a fall in the US$ price of iron ore over the outlook period are the principal causes of this dip in the real export values of minerals from 2014-15.”
The full report can be found here