In its June edition of Australian Commodities, released yesterday, ABARE forecast Australia’s commodity export earnings would soar by 40% in 2008-09 on the back of record resources prices.

In April this year Australian coal suppliers and Japanese power utilities settled thermal coal contracts at $US125 per tonne for the Japanese fiscal year 2008, an increase of 125% from the previous year.

And in mid-June, Newcastle thermal spot prices traded at a record $US166/t.

Japanese thermal coal imports are expected to grow moderately while Korean imports are set to increase by 13% in 2008. European imports are anticipated to remain “steady” and China’s 2008 imports are expected to stay at around 40 million tonnes.

Hard coking coal prices tripled in the JFY 2008 to around $US300/t thanks to strong global demand within a growing steel production climate and supply chain difficulties in Australia.

Asia was found to be driving steel growth with global steel consumption forecast to grow by 5.7% to 1.4 billion tonnes in 2008 and by a further 5.4% in 2009, with China and India expected to account for about two-thirds of the growth.

Steel production is also expected to grow at about 5% a year in Russia and the Ukraine.

Meanwhile, steel consumption in the United States was expected to remain flat due to the tightening credit market.

In 2008-09 Australia’s coal production was forecast to increase by 5% to 191Mt.

Commodity export earnings were tipped to increase from an estimated $A151.4 billion in 2007-08 to a record $212.3 billion in 2008-09.