Prices for Australia's major commodities look set to fall in the years ahead

Photo by Alex Livesey/Getty Images

Westpac has upped its near-term price forecasts for iron ore and coal, but it still sees them lower in the longer-term.

“We have lifted our near term forecasts with iron ore now around $70 a tonne at the start of 2018 but easing back to $57 a tonne by June 2018,” says Justin Smirk, Senior Economist at Westpac.

“Hard metallurgical coal prices for June 2018 have been lifted to $175 a tonne from $130 a tonne while thermal coal forecasts are now $84 a tonne, up from $76 a tonne.”

Here’s Westpac’s updated forecasts for those commodities and more looking two years ahead.

Source: Westpac

“Westpac’s Global Trade Index, which captures the momentum of export and import orders in the various global business and industry surveys, hit the highest level since June 2007 while the broader manufacturing PMI continue to hold at cyclical highs,” Smirk says.

“All this suggests that the broader demand profile for commodities will remain very constructive for commodities as we move through the first quarter of 2018.”

While he says that will underpin commodity prices early next year, over the longer-term, he sees most major commodities trading below their present levels, including iron ore, coal and LNG, Australia’s largest commodity exports by dollar value.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.