Australia’s trade surplus intact despite big fall in iron ore exports

The Australian Bureau of Statistics (ABS) has released preliminary trade data for the month of January, which revealed a goods trade surplus of $8.75 billion after a 9% fall in exports was offset by a 10% fall in imports:

  • Exports of goods in January 2021 declined $3,047 million (-9%) to $32,126 million
  • Imports of goods in January 2021 declined $2,626 million (-10%) to $23,372 million
  • For January 2021 there is a goods trade surplus of $8,754 million (original, current price, merchandise trade basis)

The 9% fall in goods exports was driven by a 10% fall in metalliferous ores, which in turn was driven by fewer iron ore exports to China:

The decline in exports of metalliferous ores was driven by a decline in iron ore, down, $963m (-7%). The decline in iron ore exports was driven by a decrease in quantity, down 10.4m tonnes (-13%) off the back of strong exports in December. The decline was partially offset by ongoing strength in prices, which increased 7% per tonne in January…

The decline in metalliferous ores to China was driven by iron ore, down $471m (-5%) to $9,665m, accounting for 80% of Australian iron ore exports in January.

Nevertheless, exports remained sharply higher year-on-year, on the back of iron ore:

January 2021 exports are $3,703m (13%) higher than January 2020, driven by:

• metalliferous ores, up $4,945m (53%)
• non-monetary gold (excluding gold coin), up $1,158m (89%)
• cereals, up $464m (68%)

Reflecting this, exports to China remain at boom levels ($12.4 billion in January):

China’s trade sanctions against Australia have clearly fired a blank.

Full report here.

Unconventional Economist
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Comments

  1. Is this a permanently new high plateau then ? All other price booms were off the back of a stimulus and returned to sub $80 FASTER than they rose above – is this time special and different?

    https://tradingeconomics.com/commodity/iron-ore

    Iron ore below $80 will halve our export revenue – China’s trade war will be devastating at that point, which is in about 6 months time according the last 6 times dating back to pre-2008 according to the supplied historical data. On average it is peak to trough of 12 months with a build up time of 6 years.

    I very VERY much remember this website spending inordinate amount of time chastising the government for presuming it would be a new permanently high plateau for iron ore – how the turns have coated.

    • We live in a time of huge volatility. Cant blame MB for everything. They are still some of the best, imo.

      If you ask me, the system no longer makes sense anymore. One look at Bonds and you can see just how idiotic we’ve become to keep the Ponzi’s running. US and Australia are just printing money like crazy to protect the few.

      https://tradingeconomics.com/australia/government-bond-yield

      The problem with US and Australia is both countrys have a Pension System thats not going to see the light of day. It can not be funded and we’re going to murder off the young in the process.

    • Quarantine Madness

      I’m not sure what happened 10-20 years ago or prices from then are relevant the world is awash with cheap money looking for a home, infrastructure, commodities and inflation will the story over the next 12 months and who knows how far it goes. I think the US really ramps it up as a cold war develops with China. They will go all out trying to develop the best technology, US developing infrastructure.