Commodity boom gets bigger

The RBA has released its monthly commodity index and its up substantially again. Even with the dollar, there is another 3.8 rise for April.

Preliminary estimates for April indicate that the index rose by 7.6 per cent (on a monthly average basis) in SDR terms, after rising by 0.8 per cent in March (revised). The largest contributors to the rise in April were increases in the estimated export prices of coking coal and iron ore, reflecting the movement to higher contract prices in the June quarter. The estimated export price of thermal coal as well as crude oil and gold prices also rose notably in the month, while sugar and cotton prices fell. In Australian dollar terms, the index rose by 3.8 per cent in April.

Over the past year, the index has risen by 32 per cent in SDR terms. Much of this rise has been due to increases in iron ore, coking coal and thermal coal export prices. With the appreciation of the exchange rate over the year, the index rose by 22 per cent in Australian dollar terms.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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  1. And yet if I look at ore prices for the month of April they’re up from $174 to $182 (4.6%) and the dollar is up from $1.03 to $1.10 (6.8%).

    Perhaps the RBA is looking at contract prices and/or coking coal is going gangbusters?

    Of course, none of this will have any effect on China because they just love paying ever higher prices for our dirt. Indeed, their demand increases the higher the price. Ergo, the Commodity Price Index will be at 200 by Christmas.

  2. FrankieFourFingers

    That is a whole lot of money printing being factored in. Someone is going to get hurt.