Australia’s resource exports set to decline over 2 years amid weaker Chinese demand, falling prices: report

Australia’s resources exports and mining sector are heavily reliant on China, with record export earnings set to fall to US$230 billion in 2024-25

China’s weak rebound following its reopening, and domestic problems compounded by lower Western exports, contributed to shrinking prices, the report added

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A truck carries iron ore at a mine in Western Australia. Iron ore is a key Australian export to China. File photo: Reuters

Published: 5:30pm, 3 Jul 2023

Resource exports from Australia, the biggest commodity and energy exporter in the Asia-Pacific, are set to fall as the country faces a slowing global economy and weaker demand from its largest trading partner China, according to a new forecast.

In the latest “Resources and Energy Quarterly” report released on Monday, Australia’s industry department estimated the country’s export earnings to fall from a record A$460 billion (US$307.3 billion) in 2022-23, to A$390 billion in the 2023-24 financial year, and then further to A$344 billion in 2024-25.

Falling energy and commodity prices were driving most of the decline as the world economy contracted “under the impact of tighter monetary conditions in major Western economies”, the report said.

It added China’s weaker-than-expected rebound in economic activity following Covid-19 lockdowns had also contributed to shrinking prices.

An excavator on a pile of coal at the Port of Newcastle, Australia. Photo: Bloomberg

“Slower world economic growth and improving supply conditions are driving most commodity prices lower. Tighter monetary policy is causing a slowdown in economic growth in the major Western economies, where labour markets have been tight,” it said. “The end of China’s dynamic zero-Covid policy in December 2022 has, so far, not seen the strong rebound most expected.”

Australia’s resources exports and mining sector – which make up about 14 per cent of the nation’s GDP and two-thirds of its merchandise exports – are the bellwethers of its economy and heavily reliant on Chinese demand, particularly for iron ore.