Export commodity prices remain high, despite forecast fall

THE OFFICE of the Chief Economist has released its latest Resources and Energy Quarterly (REQ) report for the December quarter.

Surging gold prices and a resilient iron ore industry have contributed to strong numbers to close out the year, despite a decline of 0.6% to $383 billion in the 2025 to 2026 financial year.

A further fall to $374 billion has been forecast for the 2026-2027 financial year.

The spike in gold prices followed concerns over a fresh hike in trade barriers between the US and China and speculation over further interest rate cuts by the US Federal Reserve.

“We now expect gold to remain above US$3,500 an ounce over the outlook period,” the report read.

“Oil prices have declined further because of rising supply and weak global demand.”

Export volumes are “robust” and are expected to increase to near-record levels in 2027.

Since the September 2025 REQ, forecasts have revised “substantially upwards”, which reflected the upward trending gold prices, resilient iron ore prices and the failure of the Australian dollar to rise against the US dollar.

Resource and energy earnings, while below the peak in the 2022 to 2023, remain robust in historical terms.

The next March 2026 REQ will provide detailed commentary of developments in global commodity markets and effects on the Australian outlook and operations, with an updated 5-year forecast.

Export volume forecasts remain unchanged, as volumes are expected to rise modestly over the next two years to reach close to historic peaks.

Earnings forecasts for the 2025 to 2026 financial year have been revised up $14 billion from the previous quarter, and earnings forecasts for the 2026 to 2027 financial year up by $20 billion.

Highlights from the December 2025 REQ were:

• Export volumes will hold steady or rise for most commodities over the outlook period.
• Gold earnings are forecast to rise to $69 billion in 2025–26 and $74 billion in 2026–27, driven by higher volumes and prices.
• Iron ore is expected to remain Australia’s largest earner, accounting for around one-quarter of all resource and energy commodity earnings over the next two years.
• Energy exports are set to fall over the outlook period, with declines for thermal coal, LNG and oil. A rapid decline in oil prices is expected to feed through into LNG export earnings.
• Lithium earnings are expected to pick up as prices recover from substantial falls in recent years. Earnings are forecast to rise from $4.8 billion in 2024–25 to $6.8 billion in 2026–27.
• Critical minerals exports are forecast to increase from around $11 billion in 2024–25 to $14 billion in 2026–27. A recovery in manganese exports and rising exports of rare earths and antimony will contribute to this growth.

LNG export prices were slightly down from the previously REQ due to weaker oil price for oil-linked contracts.

Lithium prices have risen as the demand for batteries for power storage picks up and supply has moderated.

The full report can be read here.