Exports To Asia Broadly Soft

Exports to most of Asia remain weak compared to a year ago pressured by lower commodity prices but also softer volumes. Exports to the US, UK and NZ continue to hold up. With over a third of Australian merchandise exports going to China, current weakness will be concerning and soft demand remains a significant uncertainty that the RBA is monitoring closely.

• Exports to China fell 3% y/y in April, the fourth straight month of contraction. Japan is Australia’s second largest destination worth around 15% of total exports and shipments fell 16.9% y/y, the 13^th consecutive decline. Korea is the third largest and exports fell 9.4% y/y. Shipments to Taiwan fell 23.7% y/y and to India 28.5% y/y. But they were up 5.1% y/y to the US and 3.3% to NZ.

Source: MNI - Market News/ABS

• Exports of Australia’s major commodities were weak with metal ores & minerals down 4.3% m/m, coal -4% m/m and other mineral fuels -4.9% m/m.
• The value and volume of iron ore exports fell in April after a large rise in the latter in March but prices have now fallen for three straight months. The weakness in quantities shipped was due to China.
• Semi-soft and thermal coal volumes both fell in April due to Japan and China but hard coking rose driven by demand from Indonesia and Taiwan. The last monthly rise in unit values for thermal & hard coking was in November 2023.
• LNG export volumes fell 2.7% m/m after a similar rise in March while prices fell for the third consecutive month.