Australia's largest commodity exports by dollar value, in one chart

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Australia has plenty of commodity wealth, but which ones are its largest export earners?

Courtesy of the Commonwealth Bank, now you know.

Commonwealth Bank

Iron ore, somewhat predictably, is in top spot with metallurgical coal coming in a distant second.

LNG sits in third spot, but, as Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank explains, it appears set to become a whole lot larger in the year ahead.

“Even on conservative commodity price assumptions, LNG should become the second largest source of commodity export revenue over the next year,” he says.

“Australia’s Department of Industry sees LNG overtaking metallurgical coal by the December quarter, but it could be even sooner if spot commodity prices are maintained and projects aren’t delayed.”

Aside from higher export volumes as more Australian LNG facilities move from the construction to production stage, Dhar says LNG’s market share is likely to get a boost from recent strength in crude oil prices.

“LNG export prices are linked with oil because LNG buyers and sellers want to take advantage of the liquidity in oil markets for hedging purposes,” he says.

“Around 70-75% of Australian LNG export capacity is linked directly to an oil-indexed contract.

“That means that any movements in predominantly two oil benchmarks — Brent and Japanese Customs-cleared Crude (JCC) — help determine the price of the majority of Australia’s LNG exports.”

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