The June quarter report from the chief economist of the Department of Industry, Science and Resources has cut back its forecast for Austalia’s commodity export revenue from $299 billion in 2019-20 to $293 billion.

But that will fall further in 2020-21 to $263 billion and then $255 billion in 2021-22.

The report also said export revenue from metallurgical coal, mostly exported from Queensland, will face a fall of about $10 billion in 2020-21.

“Export earnings are estimated to set an all-time record in 2019–20,” the report said.

“Gold – a safe haven in uncertain times – is set to be a strong performer, with prices surging to an 8-year high, and export earnings now on track to set a new record (of almost $32 billion) in 2020–21. ”

It said even with the predicted declines resource and energy earnings would be almost 50 per cent higher — in real terms — than earned in 2008–09, during the global financial crisis.

Coal and LNG, the major commodity exports from Queensland, are expected to suffer, which will have a significant impact on the state economy and the royalties the Government receives.

But there were positives. Strong prices for gold, iron ore and other minerals are leading to new investment plans, including the re-opening of mines. However, investment in new greenfield projects remains well below the levels of the previous decade.

“Data on exploration spending suggests that a recovery in mining capital expenditure is underway. Exploration spending for all commodities reached $1 billion in the March quarter 2020, up 19 per cent on March quarter 2019,” the report said.

Metallurgical coal prices have fallen sharply in recent months, reaching four-year lows as a result of the demand-side impacts of COVID-19. The Australian premium hard coking coal (HCC) price is forecast to average US$126 a tonne in 2020, down from US$179 a tonne in 2019.

Australia’s export volumes are forecast to edge down by around 2 million tonnes in 2020–21 to 180 million tonnes due to lower global demand, before lifting in 2021–22, as world steel production recovers.

Australia’s metallurgical coal export earnings are forecast to fall sharply in 2020–21, from an estimated $35 billion in 2019–20 to $25 billion. They are then expected to stage a partial recovery to $29 billion in 2021–22, as prices and export volumes lift.

Metallurgical coal will fall from $US145 a tonne ($A211) in 2019-20 to $US121 in 2020-21 and bounce back to $US140 in 2021-22.

Thermal coal will drop to $US55 a tonne 2020-21 and LNG will fall from $A11.40 a gigajoule this year t0 $8.30 in 2020-21 and lift slightly in 2021-22.

Australia’s metallurgical coal export volumes are forecast to edge down by around 2 million tonnes in 2020–21 to 180 million tonnes due to lower global demand, before lifting in 2021–22, as world steel production recovers.

Australia’s metallurgical coal export earnings are forecast to fall sharply in 2020–21, from an estimated $35 billion in 2019–20 to $25 billion. They are then expected to stage a partial recovery to $29 billion in 2021–22, as prices and export volumes lift.

“Australia’s LNG export earnings are forecast to fall back sharply by 26 per cent to $35 billion in 2020–21, due to weak contract and Asian LNG spot prices, as well as an expected rise in the Australian-US dollar exchange rate,” the report said.

“The impact of the slide in oil prices is expected to be concentrated in the second half of 2020, due to the several-month lag of the flow-on effects for oil-linked contract prices. Export earnings are forecast to edge up to $36 billion in 2021–22, tracking a forecast rise in contract and spot prices.”