Ships waiting to be loaded are seen near piles of iron ore and bucket-wheel reclaimers at the Fortescue loading dock located at Port Hedland in the Pilbara region of Western Australia. Australia’s government expects the nation’s resource and energy exports to hit a record of A$252 billion (US$182 billion) in 2018-2019, buoyed by climbing prices for commodities such as natural gas and by a weaker Australian dollar. — Reuters file photo
MELBOURNE: Australia’s government expects the nation’s resource and energy exports to hit a record of A$252 billion (US$182 billion) in 2018-2019, buoyed by climbing prices for commodities such as natural gas and by a weaker Australian dollar.
However, the country’s Department of Industry also said in a report that the value of such exports would edge back to around A$238 billion in 2019-2020 even as volumes rise again, pulled down as growing global supply and concerns over demand pressure prices. The figure for 2017-2018 was A$227 billion.
“While global economic growth, industry production and manufacturing output have continued to grow strongly so far in 2018, there are some concerning signs for resource and energy commodity producers, particularly with rising global trade tensions,” the department said in the report, released yesteday.
China and the US have been bogged down in a tit-for-tat trade dispute that has hit global markets and stoked worries over the outlook for the global economy.
China buys just over half of Australia’s commodity exports, followed by Japan, then South Korea.
Australia expects prices for steelmaking material iron ore to fall to around US$52 a ton on a free on board basis in the 2019 calendar year and US$51 a ton in 2020, as China’s steel production moderates, down from US$59.40 this year.
Still, Australia’s iron ore exports are expected to increase to 878 million tons in 2019-2020 from 869 million tons this financial year and 849 million tons in 2017-2018, driven by a ramp up in production from the country’s largest producers.
But the overall value of iron ore exports is expected to drop to US$56 billion in 2019-2020 from US$61 billion in 2017-2018.
The government said prices for metallurgical coal would average US$159 a ton in the 2019 calendar year, trimming a forecast drop to US$156.80 that it made in June. That would also be down from the US$201 a ton it sees for 2018.
It also said that prices for the commodity would average US$145 a ton in 2020, less than an earlier forecast of US$147.90.
For the first time, the department offered an outlook for lithium, used to make batteries for electric cars. Australia accounts for 17 per cent of the world’s lithium production.
Australia’s exports of spodumene, the raw material for lithium, are expected to rise to around US$1.1 billion by 2020, from US$780 million in 2017 and US$117 million in 2012.
Five large plants are planned or under construction in the state of Western Australia that will turn spodumene into intermediate products for the lithium industry such as lithium carbonate or hydroxide.
That investment pipeline will ensure Australia shifts rapidly beyond concentrate production to becoming a refiner of “significant scale” by the early 2020s, the government said. — Reuters