In what could be an apparent surrender to the prevailing price conditions of commodities in the global market today, resource-rich nation Australia on Tuesday had lowered its mineral and energy exports forecast for 2012/13.

The federal government forecaste, Bureau of Resources and Energy Economics (BREE), in its September quarter report said that year-on-year export earnings from resources and energy commodities will drop 10 per cent to A$189 billion in the financial year 2012/13, compared with a forecast of A$209 billion made in June.

This corresponds to a whopping $19 billion shaved off from the original forecast.

"We have seen the end of the current cycle of high commodity prices," Energy and Resources Minister Martin Ferguson said in a speech in Canberra. "This inescapable reality should not be a cause for great alarm or pessimism about Australia's economy."

"Combined government and industry efforts to remove infrastructure bottlenecks and improve skilled labor development can help raise productivity, ensuring we make the most of whatever international conditions exist," he said.

Iron Ore

Although exports of iron ore, Australia's main bread and butter mineral, could reach 509 million tonnes in 2012/13, the same could not be said as far as revenue earnings are concerned.

BREE estimated total export revenues from iron ore shipments will reach only A$53.15 billion ($55.83 billion), compared with the A$66.94 billion forecast in June, reflective of the prevailing weaker global prices for the key steelmaking ingredient. In June, the bureau said total exports of iron ore could reach 510 million tonnes.

"Although this is not good news, it is by no means a death knell for the Australian resources industry," Mr Fergusson said.

"It is useful to remember that the commodity prices experienced since last year were record-breakers. And although it's difficult to say when or if we might scale to those exceptional heights once more, BREE expects a rebound in some commodity prices in 2013, should global growth pick up as is expected by the International Monetary Fund."

BREE expects contract prices for iron ore will hit $126 per tonne through 2012 and $101 in 2013.

Iron ore traded to a high $US180 per tonne a year ago. But waning demand, specially from China, the world's largest consumer of metals and minerals, pressured prices of the raw commodity to fall to a 3-year low of $86 per tonne earlier this month.

Iron ore prices have since recovered. On Monday night it improved to $US105 per tonne, according to data provider Steel Index, lifted by China's plans to spend 1 trillion yuan ($158 billion) on infrastructure.

Quentin Grafton, BREE's chief economist, said the latest forecasts displayed two distinct trends.

"The prices of many resources have moderated from historic highs in 2011 and further declines are expected over the medium term in US dollar terms relative to these peaks," Mr Grafton said.

"Second, Australian export volumes, especially in terms of bulk commodities, are growing rapidly and are expected to do so for several years to come."

Other Commodities

Exports of liquefied natural gas (LNG), meanwhile, will grow by 21 per cent this financial year, thermal coal by 14 per cent, metallurgical coal by 12 per cent and copper by 10 per cent.

Prices of metallurgical coal will fall by 28 per cent this year, according to BREE, bringing down the value of exports from $30.7 billion to $26 billion.

The only major improvement on the price front is with LNG. Global prices of the chilled gas are expected to jump by 12 per cent. When this happens, total LNG exports could surge to more than $16 billion, compared with $12 billion a year ago.