Higher iron ore, coal prices boost forecast export earnings for FY17 in Australia

According to The Australian Financial Review, Australia's expected windfall from mining and energy exports in 2017 has been boosted by more than $12 billion due to the recent, unexpected strength in prices for metallurgical coal and iron ore.
Both commodities beat market expectations during the September quarter, with iron ore remaining relatively stable above $US50 a tonne and metallurgical coal surging to four-year highs over $US200 a tonne.
"A resurgence in demand from China's residential construction sector has supported higher prices for raw construction materials such as iron ore, metallurgical coal, copper and zinc; while the consolidation of China's domestic coal mines has driven increased seaborne demand for thermal and metallurgical coal.
"Recent spikes in coal prices were also supported by production disruptions in Queensland. Gold prices also rose, fuelled by increased global economic uncertainty."
Given the recent strength, the department increased its forecast for the price of metallurgical coal for the 2017 financial year to $US118 a tonne, from a June quarter forecast of $US85 a tonne, adding $8 billion to Australia's expected resources export earnings for the year.
An increase in the department's iron ore forecast to $US47 a tonne from $US43 a tonne, excluding the cost of shipping, added a further $4.7 billion to export revenues.
The increases were largely responsible for the jump in the anticipated earnings from Australia's resources exports this financial year to $175.8 billion, up $12.4 billion from a forecast of $163.4 billion in the June quarter.
However, the department warned the recent price hikes for metallurgical coal and iron ore were driven by "temporary factors" and therefore "the price of both commodities is expected to decline from current levels over the outlook period to the end of 2017".

Ref:http://www.afr.com/business/mining/higher-iron-ore-coal-prices-boost-forecast-export-earnings-for-fy17-20161006-grwo57
 
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