By Renju Jose
SYDNEY (Reuters) -Australia’s mining and energy export earnings are expected to continue to slide over the next two years due to elevated risks of trade barriers, falling bulk commodity prices and a weak global economy, a government report said on Monday.
The June-quarter report by Australia’s Department of Industry, Science and Resources said uncertainties swirling over U.S. President Donald Trump’s policies have disrupted global trade, forcing businesses to delay their investment decisions.
“The increased caution has induced further weakness in activity. The associated uncertainty is likely to impinge on world commodity demand, as the nations that Australia supplies are impacted,” the report said.
“The outlook is more uncertain than normal.”
In April, Trump imposed a 10% tariff on goods from most countries, although he suspended higher levies on many trading partners for 90 days until next month.
Trump said last week that the U.S. had signed an agreement with China, Australia’s largest trading partner, related to trade but he did not provide details.
For the 2024-25 financial year ending this month, Australia is estimated to post commodity earnings of A$385 billion ($252 billion), down from A$415 billion in 2023-24.
That is expected to fall to A$369 billion next year and to A$352 billion in 2026-27.
Prices for iron ore, Australia’s top export, and liquefied natural gas will likely ease due to higher global supply, the report said. Iron ore export earnings could fall from A$116 billion this year to A$105 billion next year and to A$97 billion in 2026-27.
Gold will shine next year and is expected to become Australia’s third-largest export after iron ore and LNG at A$56 billion with both volumes and prices expected to increase, the report said.
“Higher prices for gold, and forecast higher copper and lithium exports, are partly offsetting the impact of lower prices for iron ore, coal and LNG,” Resources Minister Madeleine King said in a statement.
Lithium prices are expected to recover slowly after the recent drop, with revenue forecast to rise from A$4.6 billion this year to more than A$5.5 billion next year and more than A$6.6 billion in 2026-27, the report said.
($1 = 1.5279 Australian dollars)
(Reporting by Renju Jose in Sydney; Editing by Jamie Freed)
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