Australia predicts a decline in ore export revenues in the next two years

Australia’s Department of Industry, Science and Resources predicts that the country’s revenues from resource exports will decline over the next two years, reflecting falling prices for key commodities and a stronger national currency. This is stated in the report of the department.

In its September report, the Department forecasts a decline in the basic price of iron ore to $92/t in 2024, $80/t in 2025 and about $76/t in 2026.

As noted, iron ore remains Australia’s main export commodity. In its September review, the department forecasts a decline in prices over the next two years, but expects foreign supplies of raw materials to grow by 1.7% annually. Revenues from exports of these raw materials are expected to reach A$107 billion in fiscal year 2024/2025 (ending June 30, 2025), and will fall to A$99 billion in fiscal year 2025/2026.

The previous June report predicted that iron ore export revenues in FY2024/2025 would amount to A$114 billion. Australia predicts a decline in ore export revenues in the next two years

The agency notes that the world’s two largest ore producers, Australia and Brazil, will continue to increase exports by 3.1% annually over the forecast period. This will be made possible by an increase in the number of new mining projects by large Australian companies and a significant expansion of production planned in Brazil, in particular by Vale and CSN. The growth of global ore trade will also be boosted by new supply from African producers.

As GMK Center reported earlier, Australia increased export shipments of iron ore and pellets by 8% in August compared to July to 73.5 million tons. Average monthly prices for Australian raw materials with an iron content of 62% in August fell to $99/t CFR China compared to $106/t in July. Prices of imported iron ore were significantly affected by the low margins of Chinese steel mills.