At the current time, Australian commodity markets find it to be a safe haven as Russia’s raging war on Ukraine and the ideals of the Chinese economy reacting to hypothetical imbalance aid in boosting their gains.
In the 2021-2022 earnings season, reports showed that the Australian exports of natural materials were set at A$405 billion ($275.4 billion). This measurement ended on June 30th and now is forecasted to hit a remarkable high of A$419 billion in the upcoming financial year 2022-2023 margin.
As global economies learn to adapt to the blatant lack of mainstream Russian exports of coal, organic gas, and crude, it is predicted that there may be a swooping drop in commodity profit henceforth at A$338 billion in the period of 2023-2024, according to the Resources & Energy Quarterly data belonging to the government analyst bodies.
While Australia ranked 2nd in thermal coal production and 3rd in gold & copper ores sectors, the nation is known to be the world’s largest and most sought exporter of liquefied natural gas (LNG), coking coal, lithium, and iron ore.
Russia used to be a worthy competitor to stand alongside to the point of healthy rivalry, but after the invasion of Ukraine, they skydived from that position—which led to Australia sweeping profits in the sectors of exporting LNG and coal, as rates for these fuels met greater standards, be it in all-time heights or an applaud worthy peak.
Iron ores though have seen extraordinary milestone levels, mostly built on the hope that China, the consumer of roughly 70% of worldwide sea-shipped volumes, will triumph in energizing its economy in the latter half of this year as it attempted to touch the yearly growth mark of 5.5%.
These leading factors led Australia to be a hotspot for commodity transactions, although it is not too happy with the fact that it is making a profit mostly because of the Ukraine invasion situation—that aspect is truly regrettable. Of course, among all these yet-to-be-ascertained hypotheticals, there are still risks to look out for in case China doesn’t meet expectations and the looming recession concerns where it is forecasted that energy prices may surge alongside stricter monetary restrictions. And, if the Russian exports hadn’t slid down considerably due to Western-imposed sanctions, then that may also aid the growing risks.
Nevertheless, the Russian supplies are mostly shunned by Western nations, namely, Europe, and these sanctions are going strong as they continue to tighten. These current facts are enough to expect steady growth in Australia’s LNG and coal all-time mean.
For this year, LNG profit is predicted to be at A$84 billion, a certain climb from last year’s A$70 billion, courtesy of the 22.8% rate hike in the Australian dollar.
Coking coal may decline this year to an average of $343 a tonne, an evident drop from last year’s $400. However, export growth may gather earnings into the A$60 billion club from the previous A$58 billion.
Thermal coal is seen to swoop down to $216 a tonne this year, unlike last when it was $241. Though, a possible hike in seaborne volumes may lead to 199 million tonnes from the prior 195 million—which will ensure their earnings would land at A$44 billion from the recorded A$39 billion.
Lithium, known to be used in battery production, is set to most likely double this year to A$7.8 billion from last year’s A$4.1 billion since volumes surge forward 24% and the rates reach 31%.
Conclusively, it’s set in stone that Australia will be able to harbour some level of safety against worldwide economic downside concerns (in the beginning), courtesy of the market growth following harsh Russian moves and possible economic decisions from China.