In the financial year 2020-21, Australia’s earnings from resources and energy exports are forecast to reach $208 billion, with a year-on-year increase of three percent predicted for each year up to FY 2010-21, while the value of Australia’s iron ore exports is forecast to reach $72 billion in FY 2020-21, with a year-on-year increase of 4.4 percent foreseen for each intervening year, according to a report by the Australian Government Department of Industry and Science.
On the other hand, the Australian Government Department of Industry and Science said that in early 2016 iron ore prices briefly rebounded to $61/mt, but, because of the increasing global supply coupled with lower demand from China’s steel sector, the Australian government’s iron ore price is forecast to decrease to an average of $45/mt by the end of 2016. At current prices, a number of high-cost producers - mostly outside of Australia - are making large losses on each metric ton of iron ore produced. A sustained period of lower prices over the projection period is expected to result in the closure of high-cost capacity as the financial losses of these companies begin to accumulate.