Australia, on path to become biggest shipper of LNG

SINGAPORE, (Reuters) Australia is the world's largest exporter of iron ore and coal, and is on the verge of overtaking Qatar as the biggest shipper of LNG. 

LNG makes up about A$50 billion in resource earnings currently, much of it due to deman from China, the world's biggest commodity exporter. 

It's little surprise that these three commodities make up the lion's share of resource earnings, with iron ore expected to contribute A$74 billion, coal A$70 billion and LNG A$50 billion.

Much of the strength in earnings from these three heavyweights is down to demand from China, the world's biggest commodity importer.

The quarterly report said China's efforts to stimulate its economy will be positive for commodity demand, but Beijing also faces risks from the as yet unresolved trade dispute with the United States.

But while Australia is enjoying the boost to earnings from higher export volumes, and rising prices for some commodities, as well as a weaker domestic currency, the government's forecaster doesn't expect this to persist.

The nominal value of commodity exports are expected to drop to A$271.7 billion in the 2019/20 fiscal year and to A$256.1 billion by 2023/24.

The decline in earnings is despite rising volumes for the three major export commodities, with the report pointing to weakening prices as the main culprit.

According to this report, LNG is slated to drop from the current A$12.60 per gigajoule to A$10.80. The decline in prices for most commodities is likely because of global supply additions and moderating demand growth from major importers such as China.

 

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