So, the government’s commodity forecaster, BREE, is out with its latest quarterly commodity price updates and as we’ve noted in the past, the relationship between anticipated volume growth and rising prices is sanguine to say the least. Here’s the release:
Australia’s resources and energy commodity export earnings are forecast to be $189 billion in 2012–13, according to the Resources and Energy Quarterly–September quarter 2012, released today by the Bureau of Resources and Energy Economics (BREE).
“The latest forecasts of volumes and prices show two distinct trends. First, the prices of many resources have moderated from historic highs in 2011 and further declines are expected over the medium term in US$ terms relative to these peaks. Second, Australian export volumes, especially in terms of bulk commodities, are growing rapidly and are expected to do so for several years to come” said Professor Quentin Grafton, BREE’s Executive Director and Chief Economist.
For the majority of major minerals and energy commodities export volumes are forecast to increase. The largest increases in volumes are forecast for LNG (21 per cent), thermal coal (14 per cent), metallurgical coal (12 per cent) and copper (10 per cent). Growth in exports volumes of iron ore are also forecast to remain robust, increasing by 8 per cent to over 500 million tonnes in 2012–13.
The forecast increase in LNG exports in 2012–13 reflects the start up of the Pluto LNG project, which will increase Australia’s LNG capacity from around 20 million tonnes to over 24 million tonnes.
That’s down from June’s forecast of $209 billion. So, coal exports are going to keep growing at double-digit rates but prices are going to rebound? Here is the money page of the report:
This magical relationship of increasing volumes and price derives from one simple assumption:
…an assumed stimulus package from the Chinese Government generating an increase in steel-related consumption demand.
We’re seriously going to hang the national budget upon this?
Bree Req Sept2012
