The Department of Industry’s quarterly report said resource and energy export earnings would hit a record of $425 billion in 2021–22 and metallurgical coal exports would hit $60 billion, a rise of $36 billion on 2020-21.

“While new waves of COVID-19 cases and the Russian invasion of Ukraine are likely to have checked the global economic recovery (and hence commodity demand), Australian resource and energy export earnings are likely to be lifted by surging energy prices,” it said.

“Export earnings are forecast to lift by 33 per cent to a record $425 billion in 2021–22, then fall to $370 billion (in real terms) in 2022–23. Earnings should steady out at $263–293 billion over the rest of the outlook.”

Queensland’s biggest export is metallurgical coal and prices surged following the Russian invasion of Ukraine. The Australian premium hard coking coal price is forecast to average over $US300 ($A400) a tonne in 2022, but was expected to fall by almost half as supply conditions returned to normal in 2023.

Prices were ultimately expected to be about $US133 a tonne by 2027, in real terms.

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Australia’s met coal exports were forecast to rise from 171 million tonnes in 2020–21 to 184 million tonnes by 2026–27. The value of met coal export exports was forecast to track with price movements, rebounding from $24 billion in 2020–21 to peak above $60 billion in 2021–22, before falling back to $26 billion by 2026–27.

Thermal coal spot prices had also spiked and the Newcastle benchmark price was forecast to ease from a peak of $US184 a tonne in 2022 to around $US60 a tonne by 2027.

Asian LNG spot prices and oil-linked contract prices were expected to remain high throughout 2022 and 2023, before declining back to more typical levels in the latter half of the outlook.

Australian LNG export volumes were forecast to increase to 82 million tonnes in 2021–22, as technical issues offset higher capacity utilisation at other plants. Volumes should then fluctuate between 79 and 81 million tonnes over the outlook.

Australia’s LNG exports earnings are forecast to rise from $30 billion in 2020–21 to $70 billion in 2021–22, and $82 billion in 2022–23 as oil-price linked contract prices surge. Export earnings are forecast return to around $52 billion by the end of the outlook period.

The report said global commodity markets were being affected by the Russian invasion of Ukraine and “the expanding array of sanctions” being applied to Russia.

“It is too early to tell how broad and long-lasting these sanctions will be, but it does appear that world trade and investment flows will become more bifurcated in line with geopolitical alliances over the outlook period. Commodity supply chains will be forced to adjust,” the report said.

“Risks to forecast export earnings in 2021–22 and 2022–23 exist in both directions. A severe disruption to commodity supply emanating from Russia’s invasion of Ukraine could push prices up further.

“There is potential for a related further rise in global inflation, and a risk of tighter monetary policy in response. New, vaccine-resistant COVID-19 strains could emerge. In the latter half of the outlook period, global efforts to build energy and transport systems based on low emission sources may help to offset the impact of energy exports coming off their peak.”