A recent report from the Department of Industry, Science and Resources signals a potential headwind for Australia’s resource sector, forecasting a notable decline in export earnings over the next two years.

While export volumes are expected to grow steadily, broader macroeconomic challenges—particularly global trade tensions—are projected to weigh on commodity prices and earnings. According to the latest Resources and Energy Quarterly, export earnings are expected to fall by approximately 8.6%, decreasing from $385 billion in FY25 to $369 billion in FY25. This downward revision serves as a cautionary indicator for investors focused on mining stocks and export-focused ASX shares, suggesting a more tempered outlook for the sector despite stable production levels.

Export Earnings Forecasts Headed Lower

According to the report, Australia’s export revenue is expected to:

• Hit $385 billion in FY25
• Fall further to $369 billion in FY26
• Decline again to $352 billion by FY27

The drop is primarily attributed to falling earnings from iron ore and LNG exports, Australia’s two major revenue pillars.

Global pressures are also at play. The report highlights:

• Ongoing trade tensions between the US and major global economies
• Prolonged weakness in China’s property sector
• Slower-than-expected progress on global disinflation

These trends could weigh heavily on mining companies in Australia that are closely tied to these global dynamics.

Iron Ore: From Boom to Burden?

Iron ore accounts for over 25% of the country’s resource and energy export earnings, making it Australia’s largest export commodity. But iron ore prices have tumbled sharply since early 2022, falling from around US$160 per tonne to just US$94.50 today.

New global supply is also pressuring prices:

• Rio Tinto’s Simandou iron ore project in Guinea is expected to begin shipments in 2025
• More mines in Africa and South America are set to come online

As a result, iron ore export earnings are projected to decline:

• From $116 billion in FY25
• To $105 billion in FY26
• To just $97 billion in FY27

This drop could impact investor confidence in related ASX mining stocks, particularly those with heavy iron ore exposure.

LNG Exports Are Also Cooling

Australia’s LNG sector isn’t immune either.

LNG export earnings are forecast to decline:

• From $66 billion in FY25
• To $60 billion in FY26
• To $53 billion in FY27

Despite the projected decline in earnings, Resources Minister Madeleine King highlighted that LNG volumes are expected to rise modestly, supporting Australia’s role in global supply chains.

That said, falling prices could continue to weigh on stocks to look out for in the LNG and energy export sectors.

What This Means for Investors

For investors eyeing ASX gold stocks, mining stocks, and energy companies, this report is a reminder that macroeconomic forces are just as important as company fundamentals.

Export-driven companies may face margin pressures, especially those reliant on commodity prices that are trending lower. However, those with diversified portfolios or long-term supply contracts may still perform well.

As Australia’s resource landscape adjusts to new global realities, staying informed and flexible will be key. Keep watching for shifts in export trends—and the opportunities or risks they may bring.

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