Australia’s resources boom continues with the latest forecast showing little change for the 2012 financial year.
According to the newly-created Bureau of Resources and Energy Economics (BREE) first quarterly survey, resource and energy commodity export earnings are forecast to reach a record $215 billion in 2011–12.
That’s down slightly (around $3 billion) from the June forecast of $218 billion. In any event that’s a 21% rise from the $182 billion in 2010-11, which was up 31% from the 2010 financial year.
At the same time export earnings from agricultural commodities is forecast to reach $34.6 billion in a separate report from the Australian Bureau of Agricultural and Resource Economics and Sciences.
That’s up half a billion dollars from the June forecast of $34.1 billion
The growth in earnings in 2011-12 is forecast to be underpinned by increases in export values for iron ore (up 26% to $68 billion); metallurgical coal (up 29% to $37 billion); gold (up 47% to $19 billion); thermal coal (up 29% to $18 billion); crude oil and condensate (up 13% to $13 billion); and liquefied natural gas (up 11% to $12 billion).
The Bureau said export volumes for the majority of minerals and energy commodities are forecast to increase, including for metallurgical and thermal coal, iron ore, gold, copper and nickel.
“The increase in export volumes for many minerals and energy commodities reflects increased mine and infrastructure capacity, particularly for iron ore and coal,” according to Professor Quentin Grafton, BREE’s Executive Director and Chief Economist.
In 2011-12, increases in export volumes are forecast for gold (up 12% to 338 tonnes); metallurgical coal (up 11% to 156 million tonnes); iron ore (up 10% to 449 million tonnes); thermal coal (up 8% to 155 million tonnes); and copper (up 12% to 950 000 tonnes).
"Total Australian mine production is forecast to rise by 10 per cent in 2011–12, mainly reflecting a 16 per cent increase in the output of energy commodities such as thermal coal, metallurgical coal and uranium.
"Also contributing to this growth will be a 5 per cent increase in the production of metals and other minerals, underpinned by rising iron ore, nickel and zinc production."
However the Bureau says prices are forecast to ease for a number of commodities reflecting assumed weak economic growth, particularly in north America and Europe. Prices for iron ore, metallurgical and thermal coal, aluminium and nickel are forecast to decrease in 2012 compared with 2011.
“While prices for a number of commodities are forecast to ease in 2012, it should be noted that in some cases they are coming off record high levels and still indicate a very positive outlook for the industry,” said Professor Grafton.
The most notable change was in the forecast for coking coal (metallurgical) to reflect the lingering impact of the floods in Queensland late last week and in the March quarter of 2011.
Australia is the world’s biggest coking coal export and cut its production estimate 6% to 161 million tonnes and the export forecast by 5% to 156 million tonnes (mentioned above).
On the other hand iron ore production was forecast to rise 0.7% to 470 million tonnes in 2011-12.
But output of iron ore, another key steelmaking ingredient, is seen at 470 million tonnes, 0.7% above earlier forecasts, the Bureau of Resources and Energy Economics said in a quarterly report on Tuesday.
The cut in coking coal forecasts is unlikely to cause major market ripples after the central bank repeatedly warned the sector was recovering from early 2011 floods and cyclones slower than previously estimated.
Output of gold, the nation’s third-biggest export earner after iron ore and coal, remained unchanged at 277 tonnes.
Still, export revenue from iron ore and coal jumped 42% to $101 billion in the year to June 30 as coking coal prices shot up to a record $US330 per tonne in the second quarter in response to floods in the first quarter in Queensland, and production shortfalls in Indonesia and Colombia.
"The high-quality metallurgical coal contract prices for the December quarter 2011 are expected to settle at around $US285 a tonne, below the September quarter price of $315 a tonne…(and) in 2012, hard coking coal prices are assumed to average $US246 a tonne ," BREE said yesterday.
Australia’s agricultural export earnings are forecast to rise in 2011-12, despite uncertainty about the economic outlook for some major OECD countries.
For Agricultural commodities the $34.6 billion of export earnings for 2011-12 is a record in nominal terms and the second highest in real terms after 2002-03, according to ABARES acting Deputy Executive Director, Terry Sheales.
This forecast represents an increase of 6.5% from an estimated $32.5 billion in 2010-11 and represents an upward revision from the forecast released in June by ABARES.
“While there is considerable uncertainty associated with the economic outlook for some major OECD countries, robust economic growth in the Asian region is expected to provide support to demand for Australian agricultural exports,” Dr Sheales said.
The forecast increase in agricultural export earnings is supported by expecte
