(Bloomberg) -- Tumbling prices of coal and liquefied natural gas will see Australia’s annual earnings from commodities exports slump over the next two years, according to government forecasts.
Export earnings are projected to decline to about A$400 billion ($256 billion) in the 12 months to June 30 from a record A$467 billion in the previous year, the country’s Department of Industry, Science and Resources said Tuesday in a report. Earnings will slip further to A$352 billion in fiscal 2025.
“World demand is soft, and improved supply conditions for some commodities will also see prices retreat further from the extraordinary peaks of 2022,” the department said. “Slower growth in the Chinese residential property sector is lowering demand for steel, with flow-on effects for iron ore.”
Weaker growth in China, the top commodities consumer, has weighed on the outlook for key raw materials, along with slowing urbanization and population expansion, the report said. At the same time, supply chain challenges have eased after the end of the La Niña weather phenomenon and Covid-related disruptions, adding further pressure on prices.
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Australia, the world’s largest producer of lithium and a supplier of other battery metals, is poised to benefit over the longer term from rising investment in electrification of transport and clean energy.
“Demand for Australia minerals is growing as the world works to build the technology needed to decarbonize,” Resources Minister Madeleine King said in a separate statement. “The road to net zero is paved by Australia’s critical minerals.”
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