Australia’s mining and energy export earnings are expected to decline over the next two years. This decline is influenced by softer bulk commodity prices, increased global supply, and uncertainties in trade policies.
Export revenues are anticipated to decrease from A$415 billion in 2023–24 to A$385 billion this year, dropping further to A$352 billion by 2026–27. Iron ore and LNG, being top exports, may see price reductions due to higher global supply. Forecasts predict iron ore earnings will decrease from A$116 billion this year to A$97 billion by 2026–27.
Global Trade Uncertainties
Uncertainty around U.S. trade policy is causing caution in global businesses. This results in investment hesitations and reduced commodity demand.
Contrastingly, not all sectors face a downturn. Gold is on track to become Australia’s third-largest export next year, with values expected to rise to A$56 billion. Both gold prices and volumes are anticipated to increase. Similarly, lithium is predicted to recover gradually, with earnings projected to increase from A$4.6 billion this year to A$6.6 billion in 2026–27.
What we’re seeing here is a fairly direct consequence of basic supply-and-demand mechanics working alongside geopolitical shifts. The projections for Australia’s mining and energy exports point to a steady drop, with the fall in bulk commodity prices being the main driver. That’s coupled with more supply coming onto the market from other countries, which adds pressure on prices. Put plainly, there’s more of the stuff being dug up and sold elsewhere, and Australia can no longer ask the prices it used to.
The figures aren’t marginal. A fall from A$415 billion to A$352 billion over three financial years isn’t a gentle contraction. That’s a real narrowing of margin for those exposed to these commodities, particularly iron ore and LNG. We should treat this forecast as more than a gentle warning—it’s a redirection point. In this environment, prices are no longer buoyed by tight supply or resilient overseas demand. The oversupply scenario, especially in iron ore, tends to encourage sharper shifts rather than gentle declines.
Let’s not ignore the trade signals from abroad either. The uncertainty tied to American trade strategy causes hesitation far beyond Washington. When global investors pull back or wait on decisions, that can starve large projects of confidence—and that’s immediately felt in commodities, which are often the first to be dropped from portfolios during cautious phases.
Gold And Lithium Trends
One interesting counter-theme here is gold. Its rise isn’t just from one-off demand squirts or speculator-driven momentum. Price increases paired with volume growth are not accidental. These are being underpinned by strong central bank interest and a wider shift into safer assets during periods of economic noise. A$56 billion in expected export value next year puts it ahead of many peers—and it now matters a great deal.
Meanwhile, lithium, after having taken a hit recently, is climbing back slowly. That sluggish recovery isn’t immediate, but it’s measurable and targeted. Demand is largely battery-driven, and we’re seeing enough stability in electric vehicle production—especially from Asia—to underpin the A$6.6 billion projection for FY2026–27. It won’t return to the dizzy peaks we saw two years ago, but a floor seems to be forming.
Those watching derivatives should adjust for increased skew in base metal exposure, chiefly iron ore, which is encountering both weaker prices and increased delivery timelines in some regions. Volatility is likely to remain higher over weekly blocks, especially as policy uncertainty in trade agreements flickers into inflation readings and reshapes near-term inflation forecasts.
Further to that, hedges placed on LNG futures need to be reviewed against revised shipping schedules and softened long-term purchasing contracts from key buyers like Japan and South Korea. The exit from rigid long-term buys, especially in northeast Asia, leaves volumes still high but transaction certainty lower.
As for longer-dated commodity options, it’s worth focusing attention where price and volume move upward in tandem—we’ll be spending more time with gold and lithium contracts, not least because they reflect different macro assumptions. Gold tracks inflation expectations and geopolitical risk more cleanly, while lithium sits within the renewable tech supply chain, which remains financially supported across major economies.
Iron ore sellers may revisit rolling quarterly hedges inward, cutting exposure length, as China’s real estate-linked demand drags out its recovery. That market, as most know, simply doesn’t respond to stimulus with the same snap it did five years ago.
What some may ignore—but we won’t—is that these shifts are not cyclical bumps but more structural resets. A change in trade assumptions and production patterns means that measured adjustments today matter more than quick swings tomorrow.
We find, particularly over the last few months, that positioning has rewarded those prepared for a flatter price regime. The less headline-grabbing gains are the ones most likely to hold.
