MELBOURNE (Reuters) - Australia’s commodity exports are likely to hit a record of $281 billion in the financial year through June 2020, according to a government report on Thursday, boosted by a weaker local currency and rising volumes of iron ore.
Australia’s Department of Trade and Industry said it expects the value of exports to drop 9% during 2020-2021, from September forecast of $282 billion, as the currency recovers and amid extended price weakness in commodities such as coal.
Australia, the world’s biggest exporter of the steel-making ingredient, nudged up its forecast for iron ore to $71 for the current financial year from a September prediction of $70, and to $61 for 2020-2021 from an earlier outlook of $58.
Across other commodities, the country sharply cut price expectations for copper, oil, metallurgical coal, zinc and lithium as global economic growth deteriorated.
“In 2019, global industrial production and trade have weakened, largely due to the U.S.-China trade tensions, however, mid-December’s “phase-one” trade deal is expected to aid a recovery in 2020,” the department said.
It revised down its forecast for metallurgical coal by 8% to $154, from $168 for the current financial year.
The department sharply cut copper’s price forecast for the 2020-2021 financial year to $6,055 from a September forecast of $6,493. For 2019-2020, it trimmed its forecast to $5,865 from an earlier outlook of $5,905.
It has also cut its price outlook for oil to $63 for this year from a September forecast of $68.
For zinc, the department slashed its expectations by 9% to $2,241, and to $552 from a September forecast of $613 for spodumene prices.
Reporting by Melanie Burton, Editing by Sherry Jacob-Phillips