Resources and energy exports hit record high

1 July 2021

Australian resources and energy exports have hit a record high of $310 billion in 2020-21 – almost a third of a trillion dollars – according to the latest Resources and Energy Quarterly (REQ) update.

Resource export earnings are estimated to be almost seven percent higher than the record set last financial year, with earnings expected to rise even further to $334 billion in 2021–22.

Queensland Resources Council (QRC) Chief Executive Ian Macfarlane said Queensland’s major commodities of coal, LNG, bauxite and zinc are helping drive the strong growth outlook.

“The resources sector underpins our state and national economy, which is why it’s been so important to keep resources companies operating safely during COVID-19,” he said.

“It’s also why the QRC is working so closely with the State Government to work out the best way to keep our FIFO and DIDO workers safe, as well as protect the communities in which they work and live.”

This week the QRC renewed its offer for Queensland’s resources sector to assist the State Government with vaccine transport and by providing regional facilities and health staff to support vaccination hubs if needed.

Mr Macfarlane said the latest outlook for resource exports shows the world economy is bouncing back from the impact of the COVID-19 pandemic.

“Metallurgical coal companies are benefiting from a surge in world steel production, with Australian export volumes expected to increase by around 10 percent to 2023,” he said.

“The price for metallurgical coal is also set to increase, with the Chief Economist reporting prices have regained all of the losses incurred due to China’s informal ban in Australia’s coal imports.

“There’s also good news for thermal coal producers, with the Japanese thermal coal contract reference price now finalised and set to increase by 60 percent on the previous year.”

Queensland’s other powerhouse commodities are also in line for significant growth, notably zinc, with New Century Resources’ Century Mine in North-West Queensland expected to boost plant throughput by 20 percent.

MMG’s Dugald River increased its output of zinc by 38 percent year-on-year in the March quarter 2021.

Mr Macfarlane said strong demand for LNG from emerging Asian economies is expected to increase by 44 percent due to declining local domestic gas production, the expansion of gas-fired power generation and new LNG infrastructure developments.

He said increasing demand for aluminium was behind a 22 percent rise in prices in the first half of 2021.

“World demand for aluminium is expected to remain strong in the second half of 2021 and likely to push prices to an average US$2,130/tonne, which is up 25 percent from 2020,” he said.

“The positive forecast for resources exports is great news for our sector and great news for Queensland, because it means more money flowing through the state economy, more jobs and increased prosperity for the businesses that provide goods and services to the resources sector.”

 

* The REQ contains the Office of the Chief Economist’s forecasts for the value, volume and price of Australia’s major resources and energy commodity exports. Click here for the June report.