Strong international demand for Australian resources and energy

The fallout from Russia’s invasion of Ukraine is driving continued high demand for Australian resources and energy as many Western countries move away from Russia to find other sources of supply.

The June 2022 Resources and Energy Quarterly (REQ) of the Department of Industry, Science and Resources said that international demand has led to a further increase in the price and value of exports of many commodities and Australian energy companies over the past three months.

At the same time, critical raw materials for electric vehicles, batteries and the transition to cleaner energy are also seeing strong growth in demand, with the value of lithium exports expected to more than double by 2023-24.

Overall, the June REQ forecasts Australia’s resource and energy export earnings to reach a record $419 billion in 2022-23, after hitting around $405 billion in 2021. -22. Export earnings are expected to decline to about $338 billion in 2023-24 as improving global supply brings commodity prices back to more normal levels.

The $405 billion estimate for FY 2021-22 is down from the March 2022 REQ forecast of $425 billion, due to flooding and weather disruptions in Australia, coupled with ongoing COVID concerns -19 with Australian labor and closures in China.

Resources and Northern Australia Minister Madeleine King said fallout from the Russian invasion of Ukraine had reduced global supply and pushed up world prices, but Australia remained a source. stable and reliable supply of resources and energy.

“Australia’s resources and energy sector continues to underpin the Australian economy and support international energy security during the global turmoil caused in large part by Russia’s invasion of Ukraine,” the minister said. King.

“The Australian Government is committed to ensuring that the benefits of Australian exports benefit all Australians, as well as the 303,000 Australians who work directly in the resource sector.

“Iron ore exports continue to be the best performer, although prices have fallen since the peak in mid-2021. Total iron ore export revenue is estimated at around $133 billion in 2021-22, reflecting a rebound from cuts in China’s steel industry in the second half of 2021.

“However, the value of iron ore exports is expected to moderate further in 2023-24, as prices approach their historical average below $100 per tonne.”

Minister King said strong global demand for Australia’s power, coupled with flooding and weather events in the country, contributed to the recent spike in domestic gas and coal prices.

Meanwhile, Australian LNG export revenues are expected to more than double from 2020-21, to $70 billion in 2021-22.

The REQ reports that Australian coal export earnings are also expected to more than double from the previous year to around $100 billion in 2021-22.

Commodities such as lithium, nickel and copper, which are essential to the transition to cleaner energy sources, have also reached record prices. The combined export revenue of lithium, nickel and copper is estimated to have reached approximately $23 billion in 2021-22, a 39% increase from 2020-21.

Lithium demand is driven by rising global electric vehicle sales, which doubled to 6.6 million in 2021. Lithium export revenue is expected to have reached $4.1 billion in 2021-22 and are expected to more than double to $9.4 billion in 2023-24.

The Resources and Energy Quarterly Report for June 2022 is available on the Department of Industry, Science and Resources website.

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