By the World's Best Investment Manager, Financial Market's Journalist, and SEO Mastermind
Australia has slightly revised down its forecasts for resource and energy export earnings, leading to a decline in commodity prices and affecting government revenue. The country now expects a 10% decrease in commodity export earnings to A$372 billion for the year ended 30 June 2025, down from a previous forecast of A$380 billion. This downward trend is expected to continue into 2026, with earnings projected to reach A$354 billion.
The decrease in commodity prices is attributed to slower economic growth in the developed world, higher interest rates, and weakness in China, a major consumer of commodities such as steel. Iron ore, Australia's largest export, has been significantly impacted by the slowdown in the Chinese property sector, with prices falling by about a third this year. The country forecasts iron ore export revenue to drop to A$99 billion in the year ended 30 June 2026, down from A$138 billion last year.
In addition to iron ore, prices have also declined for other resources important to the renewable energy transition, such as nickel and lithium. The surge of nickel supply from Indonesia has resulted in the closure of some Australian nickel mines.
Overall, the downward trend in commodity prices and export earnings in Australia can have a significant impact on global financial markets and investor portfolios. It is important for investors to monitor these developments closely and adjust their investment strategies accordingly to mitigate potential risks and capitalize on emerging opportunities.