Longer-term readers of MB will recall that we fought a long battle with the idiot optimists in what used to be called the Bureau Resources and Energy Economics (BREE). Eventually, we so salted the earth around the failed forecaster that it was disbanded and its primary output shifted to the Office of the Chief Economist within the Department of Industry. Since then, it has done a better job of being realistic with its forecasts which is important since they form a critical input for the budget.
Today is has sustained that sense with its March QTR update which looks out to 2025:
Return of the iron ore price floor!
We can quibble over the details but basically, the Office sees Australian exports earnings falling forever now:
The permanently high plateau of dirt
There will be a bit of baton passing, with iron ore the chief laggard, with some small offset in base metals which are in some kind of supercycle (to which I reply with a giant yawn):
Base metals supercycle
I expect it to be worse but this is close enough for a government forecaster.
China’s new Five Year Plan makes it so with less infrastructure and less housing plus urbanisation sliding down the backside of the boom. There is nothing proposed globally that can offset that trend for resources.
