Qld exports were $21bn lower in 2020 due largely to lower coal and LNG prices

At the launch of the Queensland Premier’s Export Awards in May 2019 at the Tower of Power, 1 William St, I spoke about how Queensland’s exports had soared to record levels over the previous few years, largely as a result of higher coal prices and new LNG exports (check out my QEW post on the launch). But coal prices have fallen since then, and plunged last year as the pandemic reduced demand (see chart below, noting the red line is the coking coal futures price for contracts settling in the next month and the blue line is the same type of futures price for thermal coal).

Lower average coal prices (and also LNG prices) over 2020 had a big impact on the dollar value of Queensland’s merchandise exports over the year. ABS preliminary data released today showed a $21 billion fall from $84 billion in 2019 to $63 billion in 2020. Below is a handy chart that Dr Marcus Smith included in his LinkedIn post earlier today.

Lower coal prices have meant billions of dollars less in royalties for the state Treasury and have led to questions about the viability of several mines. For instance, regarding the Adani Carmichael mine, Reuters reported last October that “Analysts have questioned the mine’s viability, given a steep fall in coal prices in the past two years, and increasing pressure on banks and insurers not to lend to thermal coal companies because of climate change.” Miners and the state government will be pleased that coal prices appear to be on the way back up in 2021.

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