The Australian Bureau of Agricultural and Resource Economics (ABARE) is predicting a positive outlook for the global steel industry in 2010-11, which will drive iron ore and metallurgical coal exports up to $35.1 billion and $30.5 billion respectively.
In its March quarter Australian commodities review, ABARE forecast steel consumption would grow rapidly by 8% to 1.3 billion tonnes in 2010-10, thanks to continued industrialisation in developing economies.
This follows a 9% decline in steel consumption in 2009-10.
Furthermore, steel consumption is projected to grow by an average of 6% each year to reach 1.8 billion tonnes by 2015.
“As the world’s largest exporter of iron ore and metallurgical coal, increased import demand will underpin significant increases in Australia’s exports of steel-making raw materials over the medium term,” the Bureau said.
The predicted $35.1 billion worth of iron ore exports would be a 21% increase on the $29.04 billion expected this year, making it the single largest export resource in Australia.
This would also eclipse the previous record of $34.2 billion set in 2008-09.
However, there is only expected to be a slight increase in production from the 390.9 million tonnes this year to 398.4 million tonnes in 2010-11.
Metallurgical coal exports, meanwhile, are expected to rise 30% from $23.5 million this year to $30.5 million in 2010.
Again, production will only marginally increase from 152.8 million tonnes this year to 155.8 million tonnes in 2010-11.
“Australian exports of iron ore are projected to increase at an average annual rate of 7% over the outlook period,” ABARE said.
“By 2015, Australia’s iron ore exports are projected to account for 42% of world trade, as several large projects scheduled for completion during the period are expected to meet demand growth.”
In all, Australia’s minerals exports are expected to generate $129.87 billion in 2009-10 and $153.97 billion in 2010-11, with metals exports accounting for $74.72 billion and $87.89 billion respectively.
Australian gold mine production is forecast to increase by 11% to 242 tonnes in 2009-10, then 10% to 267 tonnes in 2010-11 and between 266 tonnes and 276 tonnes until the end of 2015.
According to ABARE, the value of Australian gold exports will fall 9% to $14.7 billion in 2009-10, but are projected to grow in 2010-11 to $16.7 billion.
Nickel production will grow from 177,000 tonnes in 2009-10 to 182,000 tonnes in 2010-11, with export values rising from $3.04 million to $3.51 million respectively.
Copper ore and concentrate production will fall slightly from 1.89 million tonnes in 2009-10 to 1.86 million tonnes in 2010-11.
However, ABARE said the export values will rise from $6.2 million to $6.82 million respectively.