Copper and uranium prices rise as world seeks a low emissions future
The 5-year official forecasts for commodity prices reveal some surprising winners and losers
3 min
The Department of Industry and Resources has released its official five-year forecasts for commodity prices, with the iron ore price expected to trade more than 25 percent lower than where it is today in FY29. Meantime, copper, nickel and uranium prices are expected to rise materially as the world decarbonises and embraces greater electrification and nuclear energy.
Mining stocks comprise a huge proportion of the ASX, and commodity prices directly affect share prices and company earnings. Therefore, these official price forecasts can provide valuable insights for shareholders of major miners like BHP, Rio Tinto, Fortescue, Mineral Resources and South32.
Australian resource and energy export earnings are forecast to be $417 billion in FY24. This is about 10 percent lower than the record $466 billion in exports last year. Those record exports were largely the result of a spike in energy prices as Western countries sought to avoid Russian oil and gas. Export earnings are expected to fall to about $369 billion in FY25 due to falling commodity prices, primarily energy prices, and a rising AU/US dollar. Exports would then level out through to FY29.
Iron ore is expected to remain Australia’s biggest earner among all our resource and energy exports, followed by liquified natural gas (LNG), other metals, metallurgical coal, thermal coal, base metals, and gold. The iron ore price closed 1.5 percent higher overnight at US$104 per tonne. It’s fallen 10.5 percent over the past month due to weaker Chinese demand. The department is forecasting an average price of US$103 per tonne in FY24. By FY29, the average is expected to have fallen to US$75 per tonne.
LNG prices are expected to fall from an average of AU$17 per gigajoule this financial year to AU$12 per gigajoule in FY29. Metallurgical coal will fall from US$289 per tonne in FY24 to US$207 per tonne in FY29. Thermal coal will drop from US$135 per tonne in FY24 to US$115 per tonne in FY29.
The oversupply of lithium seen last year as global production ramped up while demand fell amid fewer people buying electric vehicles (EVs) is set to continue to weaken lithium commodity prices. Some Australian lithium miners, such as IGO and Core Lithium, have suspended some of their operations after lithium prices plummeted in 2023. The department expects an average price of US$1,800 per tonne this year, falling to an average of US$1,231 per tonne in FY29.
Some particular metals are expected to soar in value due to the green energy transition. The average price of copper, which is essential for electrification and used in solar panels, wind turbines and EVs, is expected to be about US$8,258 per tonne this financial year. By FY29, the department expects copper to be trading above US$10,000 per tonne.
The nickel price has fallen dramatically in recent times, largely due to much new supply generated in Indonesia by Chinese-backed operators. The nickel price has dropped from an average price of US$23,911 in FY23 to US$16,845 today. The Federal Government recently added nickel to its Critical Minerals List to give Australian producers access to funding for support. The resources department expects the nickel price to recover somewhat to an average price of US$20,950 in FY29.
Another commodity expected to rise significantly in value over the outlook period is uranium. Many countries are embracing nuclear energy and building small modular nuclear reactors (SMRs) to support domestic energy needs. The uranium price leapt from an average US$51 per pound in FY23 to a 16-year high of US$106 per pound in February. The department anticipates an average price of US$85 per pound for FY24, rising to US$119 per pound in FY29.
“While global prices are easing, the [forecast] shows demand is likely to be sustained for commodities used in low emissions technologies, including iron ore, copper, aluminium and lithium,” said Resources Minister Madeleine King. The department noted that Chinese demand will continue to heavily influence commodity prices, however, India is now experiencing the world’s strongest economic growth and its expanding manufacturing sector will mean higher demand for resources.
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Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
4 minA sharp technology sell-off has exposed a new anxiety on global markets: whether the enormous borrowing behind the artificial-intelligence infrastructure boom can generate sufficient returns as interest rates rise and Chinese competition intensifies.
The artificial-intelligence investment boom has powered technology shares, semiconductor manufacturers and data-centre operators to extraordinary heights. Last week, investors were given a reminder that much of this expansion is being built with borrowed money.
The technology-heavy Nasdaq Composite fell 4.5 per cent over the week ended October 16, its weakest performance since late June. Semiconductor shares suffered an even deeper correction, with the Philadelphia Semiconductor Index losing about 11.4 per cent.
The selling spread quickly through global markets. Micron Technology fell 14.6 per cent over the week, while South Korea’s Samsung Electronics and SK Hynix dropped approximately 18 per cent and 24 per cent respectively.
This was more than a routine bout of profit-taking. Investors were reassessing three interconnected risks: higher interest rates, the rapidly expanding debt burden attached to AI infrastructure and the prospect of stronger competition from Chinese memory-chip manufacturers.
The debt behind the AI build-out
Artificial intelligence requires a physical infrastructure network of enormous scale. Data centres must be built, advanced processors purchased, power supplies secured and cooling systems installed before customers begin generating meaningful revenue from them.
Technology companies are increasingly supplementing their own cash with corporate bonds, syndicated loans, equipment leases, private credit and project-level financing.
JPMorgan describes the emerging funding model as a combination of conventional corporate borrowing and project finance tied to individual data-centre assets. In Australia, the Reserve Bank estimates that syndicated loans accounted for approximately three-quarters of data-centre financing during 2025 and 2026 to date.
The numbers are becoming large enough to affect broader credit markets. The Federal Reserve Bank of Dallas has cited Wall Street estimates suggesting AI-related investment-grade bond issuance could approach US$300 billion in 2026 alone.
That borrowing is not automatically problematic. Debt can be an efficient way to finance long-lived infrastructure when future revenue is sufficiently predictable. The concern is that AI technology, customer demand and computing economics are changing much faster than the repayment schedules attached to the assets.
A data centre financed today may carry debt for years. Investors must therefore make assumptions about future utilisation rates, electricity prices, chip performance, customer concentration and the amount businesses will ultimately pay for AI computing.
When interest rates rise, those assumptions become less forgiving.
Inflation changes the calculation
September’s US inflation data intensified the pressure. Consumer prices increased 3.7 per cent over the year, ahead of market expectations and up from 3.4 per cent in August.
The hotter reading reduced confidence that interest rates would fall quickly and pushed bond yields higher. That matters particularly for companies whose valuations depend on profits expected well into the future, as well as highly leveraged infrastructure operators that may need to refinance.
CoreWeave has emerged as a closely watched test case. The specialist cloud-computing company has accumulated substantial debt and lease obligations to build AI capacity, while relying on a concentrated group of large technology customers.
Its shares fell sharply during the sell-off, while the cost of insuring its debt against default climbed. CoreWeave has argued that its contracted backlog more than covers its obligations and that financial markets do not always understand its business model. Nevertheless, its securities have become a proxy for investor confidence in debt-funded AI infrastructure.
Oracle, another major investor in AI computing capacity, fell 8.8 per cent in Friday trading, while CoreWeave dropped 15.5 per cent.
The question is shifting from how much AI infrastructure can be built to how profitably it can be operated.
China adds another source of pressure
Interest rates were not the only catalyst. Reports of advances by Chinese memory-chip producer ChangXin Memory Technologies raised concerns that lower-cost Chinese products could increase competition across the global semiconductor industry.
Memory chips are essential to AI systems, but the industry is historically cyclical. Periods of tight supply and high pricing can encourage rapid investment, eventually producing oversupply and falling margins.
The prospect of a well-funded Chinese competitor expanding its technological capabilities unsettled investors in Samsung, SK Hynix and Micron. It also demonstrated that AI-related demand does not insulate chipmakers from conventional competitive pressures.
That combination—slower rate cuts, more expensive financing and potentially cheaper supply—challenged the assumption that every company exposed to AI would enjoy continually expanding margins.
A reset rather than the end of the boom
The sell-off does not establish that the AI boom is ending. Demand for computing power remains strong, the largest technology companies continue to generate formidable cash flows and many infrastructure projects are backed by long-term customer contracts.
What has changed is the market’s willingness to overlook the price and financing structure of that growth.
The most resilient companies are likely to be those able to fund investment from operating cash flow, secure long-duration customers and demonstrate that new capacity will earn returns comfortably above its financing costs.
More speculative operators may face greater scrutiny, particularly where debt is expensive, customers are concentrated or expected revenue depends on demand that has not yet materialised.
For Australian investors, the lesson extends beyond US technology shares. Local data-centre operators, infrastructure funds, electricity suppliers and property groups are increasingly exposed to the same investment cycle.
Artificial intelligence may remain one of the defining growth themes of the decade. But last week’s correction showed that enthusiasm for the technology does not eliminate financial discipline.
The next stage of the AI boom will be judged not only by computing power, model performance or demand for chips, but by something more traditional: whether the assets being financed can generate enough cash to repay the money borrowed to build them.
Fact box
Nasdaq Composite: Down 4.5 per cent for the week ended October 16, 2026
Philadelphia Semiconductor Index: Down approximately 11.4 per cent
Micron Technology: Down approximately 14.6 per cent
Samsung Electronics: Down approximately 18 per cent
SK Hynix: Down approximately 24 per cent
US September inflation: 3.7 per cent annually
Estimated 2026 AI-related investment-grade issuance: Approximately US$300 billion
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