The baffling strength of iron ore revenues

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I was going to write this post yesterday but Damien Boey has beaten me to it:

The trade balance has come in surprisingly strong, delivering “nominal easing” to offshore-exposed companies and their relatives. The September trade balance surprised well and truly to the upside, rising to $7.2 billion from an upwardly-revised $6.6 billion. We were especially surprised by the bounce in trade, because coal and iron ore exports have performed so poorly of late.

Yesterday’s trade data had iron ore receipts at near record highs. Coal has come off but not as much as expected. The latter is becasue a lot of volue is still traded on quarterly and annual contracts so that will adjust in time. But the former makes no sense at all given big price and volume falls from August onwards.

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About the author
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.