Commodity Rebound Forecast by Australia as Exports Resume Gains – by David Stringer (Bloomberg News – April 8, 2016)

http://www.bloomberg.com/

The global commodity rout looks set to hit a bottom with Australia, a key bellwether for the resources industry, forecasting the value of its commodities exports will resume rising from the second half of 2016.

Export earnings will rise by almost a third to A$208 billion ($157 billion) by fiscal 2021, the government’s Department of Industry, Innovation and Science estimated Friday in a quarterly report, after tumbling to a third straight annual decline in the current fiscal year.

The worst of the commodity price collapse is probably already over for materials including metallurgical coal, aluminum, zinc, lead and gold, Credit Suisse Group AG analysts led by Matthew Hope wrote in note dated Friday. The outlook for steel demand in China is also improving on the prospects for additional government infrastructure spending, the analysts wrote.

Despite falling prices and slower growth in China, iron ore will continue to provide the largest share of export earnings, accounting for A$71.6 billion in 2021, with revenue also boosted by a tripling of liquefied natural gas export volumes and a 71 percent surge in uranium cargoes. Commodity demand will be underpinned by urbanization and industrialization in emerging economies, the department said.

“There are some big volumes coming on line from this year,” Justin Smirk, a Sydney-based senior economist at Westpac Banking Corp. said by phone. “If you think that this year will be as bad as it gets for prices, then it’s quite reasonable to think that by 2017 there be a higher total value of exports.”

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-04-08/commodity-rebound-forecast-by-australia-as-exports-resume-gains

Comments are closed.