By Lewis Jackson
SYDNEY (Reuters) - Australia slightly revised down its forecasts for resource and energy export earnings on Monday as lower prices across a broad range of commodities and a stronger currency continued to pressure a key source of government revenue.
Australia now expects commodity export earnings to fall about 10% to A$372 billion ($256 billion) for the year ended 30 June 2025, down from a forecast of A$380 billion made in June, according to the official resources and energy quarterly. Revenues hit A$415 billion last year.
The decline is set to continue into 2026, albeit at a slower pace, hitting A$354 billion.
Commodity prices are down because of slower economic growth in the developed world, a consequence of higher interest rates, and weakness in China, a major source of demand for steel and other commodities, the report said.
Australia's largest export iron ore has been particularly hard hit by the slowdown in the Chinese property sector and prices are down about a third this year.
The country forecasts iron ore export revenue to fall to A$99 billion in the year ended 30 June 2026 from A$138 billion last year.
Prices were lower across much of the basket of resources covered by the report, including metals important to the renewable energy transition like nickel and lithium.
Lower prices driven by a surge of supply from Indonesia have forced some Australian nickel mines to shut.
($1 = 1.4550 Australian dollars)
Analysis and Breakdown:
Impact on Investments: The revised down forecast for Australia's commodity export earnings signals a challenging environment for investors with exposure to the resource and energy sectors. Lower prices across a broad range of commodities, including iron ore, nickel, and lithium, are expected to impact revenues significantly.
China's Influence: Weakness in China, a major source of demand for commodities, is cited as a key factor driving the decline in prices. The slowdown in the Chinese property sector has particularly affected iron ore prices, which are down by about a third.
Global Economic Factors: Slower economic growth in the developed world, along with higher interest rates, has contributed to the overall decline in commodity prices. This trend is likely to continue into 2026, albeit at a slower pace.
Investment Strategy: Investors should closely monitor developments in the commodity markets and consider diversifying their portfolios to mitigate the potential impact of lower export earnings. It is essential to stay informed about global economic trends and geopolitical events that may affect commodity prices.
