AUS
NZ
UK
CA
USA
IND
Highlights
- Dip in Export Value: Anticipated 6% fall in export values to $387 billion by 2024–25.
- Iron Ore and Critical Minerals: Continued growth in iron ore and expanding critical mineral markets.
- Energy Commodities Adjust: Evolving demand dynamics in energy markets.
Australia is poised to see a significant reduction in its resource and energy exports, projected to fall by 6% to $387 billion in the fiscal year 2024–25, from a previous high of $415 billion. This downturn, as detailed in the latest Resources and Energy Quarterly (REQ) by the Department of Industry, Science and Resources, reflects the compounded pressures of geopolitical tensions and fluctuating commodity prices.
The global stage remains riddled with geopolitical strife, which the REQ report predicts will sustain through the forecast period, further exacerbated by increasing trade barriers. This challenging environment is expected to keep safe-haven assets like gold in demand, though it also introduces greater price volatility across various energy commodities.
Despite the drop in export values, Australia’s resource sector might see a slight increase in production volumes. The report highlights that iron ore, a key Australian export, is likely to see a peak in output within the next three years as efforts to develop new production come to fruition. In 2024, iron ore export volumes showed a modest annual growth of 1.2%, reaching 902 million tonnes.
Furthermore, the growing reliance on digital technology is amplifying the need for critical minerals, placing Australia’s exports of these commodities in the spotlight. The demand is not just limited to rare earths but extends to base metals such as copper (ASX:BHP) and its alternatives like aluminium, fueled by their use in energy applications from artificial intelligence to data centers.
The energy sector is also undergoing a transformation, with fossil fuel demand predicted to hold steady, particularly in Asian markets, which are key consumers of Australian liquefied natural gas (LNG) and seaborne coal. However, the global economic landscape presents a mixed picture. While modest growth is expected, it may not be sufficient to counterbalance the anticipated surge in global supply, which could lead to further price reductions for commodities.
Australia’s resource and energy sectors face significant challenges due to external pressures and market dynamics, opportunities remain, particularly in the production of critical minerals and the ongoing demand in Asian energy markets. The coming years will be crucial for stakeholders to navigate these complex conditions and leverage emerging opportunities in critical and energy commodities.
