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

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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.

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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):

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

Full report here.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.