Australia's resource revenue faces ongoing pressure amid global trade risks and weak demand

Global Trade Risks Intensify Disruptions to Australian Resource Exports

The Australian Department of Industry, Science and Resources released a second-quarter report on Monday indicating that the slowdown of the global economy, falling commodity prices, and rising trade barrier risks are expected to continue weakening the export revenue of Australia's mining and energy sectors over the next two years.

The report specifically mentioned that the tariff policies pushed by U.S. President Trump have increased global trade uncertainty, disrupting supply chains and investment decisions, prompting many countries' enterprises to delay project timelines, weakening global demand, and directly impacting the economic performance of countries to which Australia exports.

"The outlook is more uncertain than ever, with trade barriers spreading caution and affecting global demand for commodities," the report noted.

Iron Ore and Liquefied Natural Gas Prices Under Pressure

Australia is a major exporter of iron ore and liquefied natural gas in the world. The report predicts that due to increased global supply, the prices of these two major export commodities will remain under pressure over the next two years.

In the fiscal year 2024-2025, Australia's commodity revenue is expected to fall from 415 billion AUD in the previous fiscal year to 385 billion AUD (approximately 252 billion USD), further dropping to 369 billion AUD in the following fiscal year, and continue declining to 352 billion AUD by the 2026-2027 fiscal year.

Among them, iron ore export revenue is expected to drop from this year's 116 billion AUD to next year's 105 billion AUD, decreasing further to 97 billion AUD by the 2026-2027 fiscal year. A similar trend is expected for liquefied natural gas revenue.

Gold and New Energy Metals Likely to Shine

Despite the evident overall downward pressure, the report expects gold to perform impressively, becoming Australia's third-largest export commodity. Gold export revenue is projected to reach 56 billion AUD in the 2025 fiscal year, with both price and production expected to rise, second only to iron ore and liquefied natural gas.

Resource Minister Madeleine King stated in a declaration: "The rise in gold prices, along with the expected increase in copper and lithium exports, partially offsets the impact of falling prices of iron ore, coal, and liquefied natural gas."

As a key metal in the new energy sector, lithium is expected to recover gradually following an earlier price decline. Lithium export revenue is anticipated to increase from 4.6 billion AUD this year to over 5.5 billion AUD next year, surpassing 6.6 billion AUD by the 2026-2027 fiscal year, securing more leverage for Australia in the new energy supply chain.

Trump's Tariff Policies and Global Economic Weakness as Major Variables

Australia's export environment faces multiple challenges. In April of this year, Trump imposed a 10% tariff on goods from most countries, but delayed higher tariffs on some trade partners by 90 days, set to expire in July, marking a crucial observation point for future global trade and price fluctuations.

Although Trump claimed last week to have reached a trade-related agreement with China, details were not disclosed, and the market remains cautious about the substantive content of the agreement.

Analysts point out that against the backdrop of slowing global economic growth, trade protectionist policies will further suppress demand and may exacerbate fluctuations in commodity prices, undermining the stability of Australia's resource-based economy.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.