Fossil fuels are predicted to replace metals as the nation’s top commodity shipped abroad.
Authorities are optimistic the value of exported Australian coal will overtake that of iron ore in the next six months.
The federal Department of Industry, Science and Resources confirmed metallurgical coal and thermal coal exports totalled $114 billion during the 2022 financial year (FY).
In FY23 this figure is expected to jump 16.7 per cent to $133B, dwarfing iron ore’s $114B sum for the same period. In the following fiscal period coal will decrease 24.1 per cent to $101B but this will still be higher than iron ore’s $95B total.
The department expects coal production to jump in New South Wales and “especially” Queensland, from 163M tonnes (Mt) in FY22 to 183Mt by FY24 (up 12.2 per cent).
“Metallurgical coal export earnings were $23B in 2020–21 but surged to $68B in 2021–22. Prices are now easing, as seasonal and short-term supply issues pass and demand edges back. This should see earnings fall moderately over the outlook period with export values eventually easing to a still-high $46B by 2023–24,” the latest resources and energy quarterly report said.
“The forecast for export earnings has been revised up by around $13B in 2022–23, and $17B in 2023–24. Thermal coal export earnings are now expected to be around US$130B (A$194B) over the full outlook period. Revisions reflect the extended La Niña cycle, which will likely add to prices over the next two years. The fallout from the Russian invasion of Ukraine has also added to price pressures over the medium term.”
During FY22 principal markets for Australian thermal coal exports in FY22 were Japan ($25.5B), South Korea ($7.3B), Taiwan ($7.1B), Vietnam ($1.8B), Malaysia ($1.5B) and Thailand ($866 million).
Top markets for metallurgical coal exports included India ($22.3B), Japan ($15.1B), South Korea ($10.1B), Netherlands ($4.3B) and Taiwan ($4.2B) during the same period.
Although China recorded nil the Australia Institute hopes communist leaders will start reversing coal sanctions after Foreign Minister Penny Wong’s official East Asia visit on 21 December 2022.
“I do not expect [changes] to happen the day after tomorrow … [and] these things will change gradually over time,” international and security affairs program director Allan Behm said according to the Australian Broadcasting Corporation.
“Nobody wants to appear to be losing face or taking a major victory, it is just always managed in a very careful way so I would expect over the next month – or so – we will have a lifting of those sanctions on trade commodities.”
Behm, who used to advise Wong, expects his former employer and Chinese Foreign Minister Wang Yi to reestablish a new “normality” and “normalisation” in bilateral relations.
“There will be movement on trade and on other political matters but I think it will be done in a calibrated, managed way, so that we do not have shock news immediately but – rather – a restoration of a mature [and] businesslike relationship over the next couple of months,” he said according to the broadcaster.