Australia resources and energy exports set to fall back in 2023–24

The September 2023 edition of the Resources and energy quarterly (REQ) was released today by the Department of Industry, Science and Resources. 

Highlights from the September REQ are:

• The world economic slowdown, including the sluggish rebound in the Chinese economy from COVID lockdowns, will cut resource and energy export earnings from a record $467 billion in 2022–23 to $400 billion in 2023–24. A further fall seems likely in 2024–25. Slower growth in the Chinese residential property sector is lowering demand for steel, with flow on effects for iron ore.
• The global energy transition continues to pick up pace, with global investment in clean energy is expected to reach US$1.74 trillion in 2023. Australia is well placed to benefit from the clean energy transition, given our rich geological reserves and expertise and track record extracting these minerals. The September 2023 REQ includes an additional chapter on the battery global value chain to complement its regular analysis on Australia’s rapidly evolving lithium sector.
• Demand for electric vehicles is a growing driver of demand for commodities such as aluminium, lithium and nickel.
• Australia’s thermal coal exports to China have returned to levels seen prior to informal restrictions being imposed in October 2020. Australia was able to divert thermal coal exports away from China to India and other nations when the restrictions were imposed, but these flows have largely reversed. However, Mongolian and Russian metallurgical coal supply to China has replaced a large amount of Australian coal. 

The overall commodity outlook remains largely unchanged from the March and June editions of the REQ. Broad factors including slower world economic growth and improving supply conditions have persisted. Tighter monetary policy is causing a slowdown in economic growth in the major Western economies, where labour markets have been tight. Falling energy prices will also take some of the pressure off central banks to keep tightening monetary policy. Geopolitical tensions continue to escalate the drive to secure the supply chains of metals and low emission technologies used to meet ‘net zero’ climate ambitions. Australia’s natural resources and our mining expertise mean we are well placed to seize the opportunities created by these developments, supporting regions and workers and cementing our position as a crucial exporter of energy and resources.