The Australian government is forecasting record resources and energy exports in 2017-18, but says exports will decline in 2018-19, Mining Weekly reported on October 6.
The Industry, Innovation and Science Department forecasts resources and energy exports of A$211 billion ($1643 billion) in the current financial year and exports of A$201 billion in the following year.
The Office of the Chief Economist expresses in its latest Resources and Energy Quarterly that resource and energy export earnings in 2016-17 increased by 27% to A$204 billion.
The report shows that the 2016-17 increase was largely driven by price increases in Australia's top two commodity exports, iron ore and metallurgical coal.
Price spikes in metallurgical coal and iron ore in 2016-17 were aided by capacity cuts in coal, a resurgence of China's steel sector, as well as by temporary supply disruptions.
"Buoyant prices for steelmaking commodities and thermal coal, and increased liquefied natural gas (LNG) export volumes, are expected to increase Australia's resource and energy export earnings to a record A$211 billion in 2017-18" Chief Economist Mark Cully said.
However, the high prices that have bolstered Australia's resources and energy export earnings in 2016-17 and (so far in) 2017-18 are not expected to last. The combination of slowing demand growth from China's steel sector and increased global supplies are expected to lower export unit values in 2018-19.
Despite the forecast decline in export earnings, LNG export growth is expected to constrain declines in export values in 2018-19.
"In the next two years, LNG export earnings are forecast to increase at an annual average rate of 26%, to reach A$35 billion in 2018-19, becoming Australia's second largest resources and energy commodity in terms of export earnings," Cully said.
(Writing by Becky Du Editing by Harry Huo)
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