Global economic growth, particularly from China, resulted in price rises for many mineral commodities and continued historical highs for others in 2007, a trend that will continue into 2008, according to the Australian Bureau of Agricultural Resource Economics.
With world steel production forecast to grow by 7 per cent in 2007 and by a further 6 per cent in 2008, iron ore prices are expected to continue their upward run into 2008.
With a number of small and large iron ore projects in Western Australia expected to come online in 2007-08, Abare forecasts the value of Australian iron ore exports will rise by a further 19 per cent next year to $18.5 billion.
After reaching a peak of more than $US690 an ounce in April 2007, the gold price dropped to $US642 an ounce in late June.
Abare forecasts gold prices to increase over the remainder of 2007 and in 2008, averaging around $US675 an ounce in 2007 and $US685 an ounce in 2008.
Nickel prices reached a record of $US54,200 a tonne in May, reflecting global supply constraints and increased demand, particularly from China.
Forecasters say nickel prices should remain at historically high levels as demand for stainless steel remains strong, averaging about $US30,000/t for the remainder of 2007 and $US28,000/t in 2008.
Production increases in 2007 are expected to outstrip demand growth in the alumina market and continue to put downward pressure on prices. Abare estimates average prices to fall from $US331/t in 2007 to about $US265/t in 2008.
